01 technological risk analysis

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Proc eed ings: Internationa l Conferenc e o n Risk Tec hnolog y & Ma nage me ntITB, Band ung , 20 – 21 Ma rch 2007

1

Keynote Lecture

Technological Risk Analysis1

Deden Supriyatman

1Coordination Division - Authority Relations for Plan of Development, Work Plan & Budget and Authorization for

Expenditures TOTAL E&P INDONESIE, Jakarta and Animator of TOTAL Professeurs Associes (TPA) Paris in

Indonesia

E-mail: [email protected]

Abstract. The exploration for, and production of (E&P) oil and gas is one of the major risk ventures

undertaken by petroleum industry. This characteristic has been recognized, and industry has been willing

to accept the risk involved in order to satisfy Indonesia needs for energy resources. The existence of this

risk is of course not unique to the oil and gas industry, but its nature is quite interesting and has, therefore,been the subject of much serious study.

During the past 30 years the petroleum industry has generated significant information on risk analysis forexploration and production. Risk analysis is a method of quantifying the effects of uncertainty. One may

learn the lessons through this keynote lecture that technological risk analysis issue is a paramount

importance. A successful technological risk analysis must be written and well documented then

communicated to everyone involved in the process and then regularly updated. Technological risk

analysis understanding for both technical professionals and management is essential, then most

importantly implemented in real world.

Keywords: Hazard, technology risks, risk analysis, risk assessment, risk management.

1 Introduction

What is meant by risk and risk analysis? Let's look at the definitions. Risk is defined as a possibility of loss; while analysis is defined as an examination of a complex; therefore, risk analysis used jointly

would refer to the examination of a complex possibility of loss.

Risk has to be managed that is why risk management terminology arose and it is then defined as the

process whereby decisions are made to accept a known or assessed risk and / or the implementation of

actions to reduce the consequences or probability of occurrence as depicted in the following formulae:

∑=

=n

i

ii f x Risk

Where i is ith

sequence; xi is consequence of undesirable event and f i is frequency of occurrence.

Risk management is not simply the reduction of risk, although this is the intended result. An objective judgement can then be made on how to operate in optimizing the level of risk on a day-to-day basis.

However, some risks may simply be unacceptable and therefore not a matter of compromise or

optimization. As with all other aspects of management, risk management is concerned with setting and

achieving goals which support overall company goals.

Managing the risk of oil and gas field facilities is necessary to assure that operations do not pose a

significant hazard to the public or those individuals who operate and maintain them. This following

Risk Analysis diagram (Figure 1) reviews one effort to implement program to manage the risk in field

facilities.

Many world class companies were challenged with having to safely operate thousands of wells,pipelines, compressors and field separation facilities built to different standards, throughout several

generations, in many different states. A new approach was needed to provide assurance that these

facilities were constructed and operated safely.



Ded en Sup riyatman

The process to assure that facilities were constructed and operated in a safe manner was broken down

into series of steps. The first step was to define risk factors. These factors involved fluid pressures and

flow rates, proximity to public areas and the composition of produced fluids.

Control It

Share orTransfer It

Diversify orAvoid It

RiskManagement

ProcessLevel

ActivityLevel

Entity Level

RiskMonitoring

Identification

Measurement

Prioritization

RiskAssessment

Risk Analysis

Figure 1 Risk factor and risk analysis derivatives

2 Risk Cause Accident and Some Details

To understand what is meant by risk, it must first be clearly differentiated from another important

concept: hazard (see Figure 2 Risk cause accident). In risk assessment, 'hazard' is a term used to refer

to a physical property or condition of a material (or a set of properties and conditions) in a situation

where the possibility for harm exists.

The term 'hazard' may on the surface look a lot like the definition of risk, but the primary difference is

that hazard is a property that is independent of frequency or consequence.

In simple terms, a hazard is a source of danger, while the risk is a quantitative or qualitative expressionof a possible loss, an expression that considers both the probability and the consequences (see

formulae above).

When identifying a hazard, there is no consideration of the likelihood or credibility of accidents, or of

any sort of prevention or mitigation. There is a very important distinction to be made here. Risks can

be controlled, lessened or minimised. Hazards either exist or do not exist; they are not controlled or

minimised.

RISKTec h 2007, Band ung, 20 – 21 Ma rch 2007



Hazards

Risks Incidents

Losses /DamagesHuman

EnvironmentProduction

Exposure

Trigger

Figure 2 Risk Cause Accidents

After defining the risk factors, it was necessary to establish design and operational requirements to

mitigate the risk. These included use of safety devices, facility design, hazard mitigation measures and

management systems.

Next, each facility had to be "graded" against the risk factors to determine the relative risk of each

facility. Equipment, operational or management system changes had to be next determined for each

facility, if necessary. Finally, modifications to the equipment or operating systems to mitigate the risk

were implemented.

Risk is inherent to world class companies businesses and operations and considered as company core

strategic issue e.g. a number worldwide plants and facilities entailing the same type of risks

Technological risk that will be developed in chapter-6 below e.g. (i) sulfur-containing products,

chlorine, ammonia, fluorine, LPG (ii) inflammable and/ or explosive and/ or toxic substances and/ or

substances that have potential long-term health risks e.g. carcinogens, etc., (iii) Hazardous substance

manufacturing, storage and transportation, have to be seriously considered by the company.

Managing risks is the key to world class companies businesses including occupational risk e.g.

driving, product handling, etc.

On risk cause accident in detail, one could refer to Figure 3




Ded en Sup riyatman

Figure 3 Risk Cause Accident: a detail

3 Risk Assessment Steps

Risk is determined using risk assessment steps (Figure 4) that vary somewhat from application to

application, but generally have a few key points in common.

A risk assessment begins with hazard identification considering the effects of structures, systems, and

components that prevent, detect, or mitigate accidents. Risk assessments may employ all sorts of

methods to determine the frequency with which a particular hazard might result in an accident or other

undesired event (sometimes rather endearingly called 'off-normal'), as well as the worst-case

consequences that could result.

It is at this stage that sciences such as mathematics (and particularly probability) and physics have a

large part to play. This lecture will not discuss the myriad methods used in rigorous risk assessment in

engineering applications. Suffice it to say that a study of probability and physics is required for anyone

professionally involved in engineering risk assessment.

The study of probability, as it relates to engineered machines and other industrial factors, is essential

to determining half of the risk equation. The study of physics (and in particular the sciences that deal

with phenomena such as fire and explosion), as well as the study of medicine and human anatomy, is

crucial to understanding and predicting the consequences of an event. This makes up the other side of the risk equation.

Engineers (and scientists, policy-makers, investors, governments, et al) then developed a means of

quantifying risk. They quickly realised that risk was best quantified as a combination of two factors

i.e.

1. How badly can something go wrong?

2. How often can it happen?

This made it easier to come up with some sort of 'number' that could quantify the level of 'risk'

resulting from a combination of consequence and frequency (which can be thought of as the

probability of something happening in a given time span).

Incidents

Losses/DamagesHuman

EnvironmentProduction

Image

Materialelements Energies Hazards

RisksExposure Activities

Failure of preventivemeasures :

(organisation, equipment,human factors)

Failure of protectingdevices

and recovery

Worsening factors : is olated personnel, no warning device,tiredness, poor health condition ...

Environment

Trigger

Activities




As an added benefit to splitting consequence from frequency, each part of the equation could be

weighted individually, according to certain criteria determined by the sensitivity of either factor in the

final decision-making process. Through this application and the definitions used above, the modern

engineering concept of risk came into being.

MORE OF PRESSURE ?MORE OF PRESSURE ?

LESS OF FRICTION ?LESS OF FRICTION ?

MORE OF ANGLE ?MORE OF ANGLE ?

22.. CCOONNSSEEQQUUEENNCCEESS ?? 33.. HHOOWW OOFFTTEENN ?? 11.. IIDDEENNTTIIFFYY

55.. RRUULLEESS ?? 66.. CCOOSSTT ??

44.. PPRREEVVEENNTTIIOONN

Figure 4 Risk Assessment Steps

PPRREE

4 Risk Assessment Method and Formal Safety Assessment Process

In oil and gas companies, it is common to apply risk assessment method (Figure 5) and the safety

assessment process (Figure 6), until the risk in “As Low as Reasonably Practicable (ALARP)”

scenario.

Figure 5 Risk Assessment Method

A ANN A ALLYYSSTTSS :: MMuull tt iidd iisscc iipp ll iinnee tteeaamm RREEFFEERREENNCCEESS :: DDeessccr r iipptt iioonn oof f ssyysstteemm,, ssuubbssyyss tteemmss,, ccoommppoonneennttss

aanndd f f uunncctt iioonnss CChheecckk--ll iiss ttss DDaattaa bbaannkkss

TT A ABBLLEESS :: Preliminary Risk Assessment(PRA)

Dangerous elements of each

Scenario

Accidents of each component of the subsystem

Hazard and op erabilit y (HAZOP)

Dangerous deviations of t he physicalparameters at each component of thesubsystem

Failure Mode, Effects andCriticality (FMEC)

Failure modes o f each componentof the subsystem

VVEENNTTIIOONN




Ded en Sup riyatman

HAZARD IDENTIFICATIONFailure case definition

Scenario

develo ment

Consequenceanal sis

Impactassessment

Frequencyanal sis

Risk simulation

RISK ASSESSMENT

Compare risk vs.decision makin criteria

RISK EVALUATION

criteria

APPLICABLEREGULATION

ALARPud ment

Risk reductionsmeasures

All risksALARP

OK YN

Figure 6 Formal Safety Assessment Process

5 Risk Assessment Form

Using the form depicted in the following Figure 7 one could easily recognize residual

risk.

HE: Hazard

ef fect

P: Probabi l i ty

R: Risk

Iden t i f i ca t ion / Reduct ion /

Figure 7 Risk Assessment Form




6 Risk-ranking Matrix

The analysis elements that enabled risk probability and severity to be classified as “with an acceptable

level of control” should be formally stated and filed in archives so that, if necessaries, this

classification can be justified.

This selection matrix is shown in the following Figure 8

RRee dd uu cc ee pp r r oo bb aa bb ii ll ii tt yy

RRee dd uu cc ee

cc oo nn ss ee qq uu ee nn cc ee ss SIGNIFICANT

Figure 8 Risk-ranking Matrix

7 Technological Risk Analysis

Field of application

This applies to all facilities operated by world-class company with hazard levels equal to or above

those set forth by a standard/ directive, by equivalent local regulations in other countries of the world

or by the classification rules set by each affiliate. In the case of non-operated assets and where

otherwise necessary, it is to be used by the teams to evaluate technological risks of the non-operated

facilities.

Risk analysis

Risk analysis is performed according to the general principles and based on a detailed description of

the facilities, their operating conditions and their environment covering:

1. Identification of hazards

Identify and characterize the hazards (substances, equipment, processes) and state the description of

the area surroundings the facilities both as a third-party asset to be protected and as a potential hazard

source for the company’s interests. Examine the possibilities for reducing hazard potential.

2. Preliminary evaluation of risks

II nn ii tt ii aa ll pp oo ss ii tt ii oo nn

FFii nn aa ll pp oo ss ii tt ii oo nn




Ded en Sup riyatman

Define and perform inventory of all possible accident scenarios resulting from identified hazards,

taking into account the historical information on accidents for similar products, processes or facilities.

Qualitative or semi-quantitative estimate of all risks have to be defined included level of probability of

occurrence of each scenario and degree of severity of potential damages. Plotting of each scenario on

the company’s selection matrix, based on the estimates related to the risk is then to be worked out.

Selection of scenarios that require detailed analysis (those judged to be in the zone “ to be studied in

detail ” of the matrix) then to be executed.

3. Detailed and quantified analysis of risks

Perform detailed study of the causes of the selected accident scenarios and of the risk-reducing

measures taken when the facilities were designed, those applied during operation, those available to

limit the impact of an accident and those to be taken if an accident occurs. Quantify the probability of

occurrence of the selected scenarios of the possible impact and of the severity of potential damages

within various distances, taking into account risk-reducing measures. For each scenario selected, so

the obtained results are plotted on the company’s risk-ranking matrix.

Identify and evaluate additional risk-reducing measures, technically practicable and at an acceptablecost, that may be taken to reduce the probability of occurrence (prevention) and/or the impact

(protection) of an accident

4. Results-based actions

Final plotting of the scenarios on the risk-ranking matrix to:

(i) justify compliance with the company’s criteria for risk management for the activities it operates:

Level 1: first priority treatment

Level 2: tolerable if proved to be ALARP (As Low as Reasonably Practicable)

Level 3: generally acceptable.

(ii) highlight the importance of the reliability and the effectiveness of the totality of the existing and

additional risk-reducing measures,(iii) rank these scenarios to identify on-site zones where specific preventive measures should be taken

and areas near to facilities which are subject to special regulations (land use planning, adaptation

of current zoning, organization of emergency services).

Perform the ranking of the priority-based, risk-reducing measures based on the nature and the

importance of the potential damages related to the accident scenarios examined, as well as on the

social and environmental sensitivity of the sites. Prepare priority-based program of actions and a

summary of the risk analysis for educational purposes is to be presented to, in addition to those that

are responsible for the study and approving it conclusions as well as all the operational staff of the site.

Implementation

The purpose of the risk-ranking matrix developed for the entire company is not to define absolute

criteria for risk acceptability, which may depend on local factors such as regulators' and stakeholders'

concerns. Rather, it is to be used to define a plan of actions for continually improving the industrial

safety of the sites.

For new facilities or for significant modifications of existing facilities this risk analysis must be

included in the scope of work of the project and corresponding priority actions must be performed

before the start-up. For existing facilities this risk analysis should define a plan of actions with

priorities set by the affiliate or unit.

8 Final Remarks




1. The technological risk analysis in is to enhance risk management and to prevent risk associated

with on site production, storage, handling and transfer of hazardous materials (inflammable,

explosive or toxic substances, or materials that pose long term health risks) and to reduce the

probability of their occurrence to as low as reasonably practicable (ALARP).

2. By having the technological risk analysis, it expectedly also protects plant employees and

neighbours from the consequences of an accident and to reduce the damage resulting from an

accident to ALARP.

3. At corporate level, a world class petroleum company could have a “Corporate Management

Documentation System”, “Health Safety Environment and Quality”, and HSEQ Charter and

“Health Safety Environment (HSE) Management” as respectively exampled in Figure 9, Figure

10 and Figure 11.

Corporate “Code of Conduct ”

and “HSEQ chart er ”

Direct iv e Explorat ion Product ion No.01

Company ru les and Genera l

Spec i f i ca t ion

Guidel ines and Manuals

Feedback Not ices

Figure 9 Example of World Class Corporate Management Documentation System

Figure 10 Example of Health Safety Environment and Quality (HSEQ) Charter




Ded en Sup riyatman

2. PLANNING

4. CONTROL &

CORRECTIVE ACTION

5. MANAGEMENTREVIEW

CCOONNTTIINNUUOOUUSS IIMMPPRROOVVEEMMEENNTT

1. POLICY

3. IMPLEMENTATION

HSE MANAGEMENT

Figure 11 Health Safety and Environment (HSE) Management System


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