Managing Major Accident RiskScott KerrCEO

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A “new player” with a solid position

■

Founded in Stavanger 2005

■

Noreco is an independent fast growing oil company with activities in the North-

West of Europe

■

Extensive exploration and development program

Licenses under development4

Producing fields7Of employees

with minimum a Masters degree73%

Discoveries during the last 3 years12

Employees from 12 nations101

Barrels of oil produced each day+10,000

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Young company – Experienced organization

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Is there a difference in handling major accident risk with a “new player”?■ No

•

same responsibilities as all other partners•

highly competent work force•

developed management system, vision, values, procedures and processes

•

and ……

■ Yes•

we are a new company –

we must develop our culture•

short decision lines from rig floor to board of directors•

integrate expertise from outside the company (partners, contractors, authorities) in to our plans

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HSE policy

Preventing major accidents is a visible and integrated part of the Management’s work in Noreco. An important activity of Noreco`s

Management Team is therefore to analyze, evaluate and handle risks that threatens the ability to reach our goals.

“Noreco is recognized as a leading company within HSE and we strive towards:

• zero accidents, • zero incidents and • zero long term impact to the environment.

We safeguard people, our facilities and the environment from harm through continued focus on health, safety and environment in all aspects of our business.”

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HSE “truths” in Noreco

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Preventing a Major Accident is no different than preventing any other accident•

Personal Safety and Process Safety are two sides of the same issue

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All activities involve risks but risks are manageable and accidents are preventable

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If a manager can not manage safety then they can not manage people (safety is not a technical challenge)

■

Response to an accident is often technical but prevention is human based

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Focus

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How do we turn our Policy into Reality?

CultureCapacityCompetence

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The Three “C”sDeepwater Horizon 2010 Deepwater Horizon 2010Culture –

What is acceptable in the company (how we do things)?

Competence –

Do we have the skills / training for the job?

Capacity –

Do we have enough people to do the job?

ValuesRules

RegulationsPolicies

PracticesProcedures

Management System

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Capacity

I skate to where the puck is going to be, not where it has been.

Wayne Gretzky■

We recruit for where we will be in 18-24 months not where we are today

■

If we find a strong candidate today we will hire them knowing that we will need their skills as we grow

Noreco G rowth Updated: 31 December 2010

6 18

6175 77

101

0

10

20

30

40

50

60

70

80

90

100

110

2005 2006 2007 2008 2009 2010

Y ear

Num

ber of em

poyees

10

Capacity

Total positions per department, 2009-2010, updated 31.12.2010

0

5

10

15

20

25

30

35

40

Num

ber o

f em

ploy

ees

20092010

2009 24 5 3 18 27

2010 37 11 5 21 27

Exploration Projects & Technology

HSE Finance/Commercial/Admin

Developments & Production

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Competency

Perform

ing

Managing

Formalized HSE & QA

Training for all

Personnel

Extended training for:•

License rep.•

Operating Personnel

Seek Continous

Improvement in deliveries

Acts &

Regulation:i.e.

• Consent• Discharge

• Permit

Vision & Strategy

Requirements

Goals –

KPI’s

–

Activity Programme

Information –

Internal

MeetingsWeb –

page NORECO AS

Pre-

quali-fication:

• Suppliers• Rigowners

• Others

Analy-sis:

Report-ing

Audits

Verifications

Training

Non-confor-

mity

REQ

UIRE

MEN

TS

CONT

ROL

Learning

Compliance with Vision, Strategy and Values

-

Courage-

Respect-

Professional-

Innovate-

Challenge

Balance Structure & CultureProactive reaction when detecting critical matters• At work •

Off duty

Ensure Risk aspects in all activitiesDevelop Workplace Heath PromotionEnsure constructive Feedbacks

Culture•

Attitude• Behaviour

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Partners / Contractors■

We do not have all needed competencies “in house”•

Our Partners and Contractors do have the expertise

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We have systems to access that expertise

Police

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Well Planning and Delivery Process

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Success criteria•

Sufficient time for planning•

Cooperation with relevant stakeholders

•

Structured process

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Steering committee•

Projects, Exploration, HSE

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Gate reviews

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Management of Change

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Risk assessments

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Peer reviews by•

License partners•

Rig contractor•

3rd party service providers

•

Well Examiner

■

External Audits

•

Ready to drill audit•

License partners

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Culture

■

Everything we say and do builds a company culture

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We can actively develop the company culture or we can let it be developed by default

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But there will be a company culture

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Noreco will actively build the culture we want –

every day by what we do, what we talk about and what we prioritize

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Culture BuildingG

rupp

eA;

Man

ager

s

Gru

ppe

B;

Seni

or c

aree

rM

iddl

e ca

reer

Gru

ppe

C;

Early

car

eer

September 2010 May 2011(indicative timeline)

Skills training

Building a feedback culture

Leadership development program: Eight days, four sessions, assignments

Team development through leadership training

Skills training Mentoring Coaching

Self-leadership and Career Awareness

Skills training Self-leadership

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Board & Management

■

The Board is active in managing company exposures•

Audit Committee reviews company risk register every quarter

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Weekly reports to board on operational issues

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Monthly board meetings with management updates

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Examples of HSE related board considerations•

Company vision and strategy (our ambitions)•

Management system (control and compliance)•

Rig selection (managing exposure and opportunity)•

New business –

what type/characteristics (competence, risk)•

Company risk register –

manage exposures / understand risk•

Annual HSE Program and Quality Plan (in Performance Contract)

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Managing Risk

NorecoEnterprise

Risk Register

Risk RegisterSvaneøgle

Risk RegisterDevelopments

NorecoFinancial

Risk Register

NorecoProject X

Risk Register

NorecoProject Y

Risk Register

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Enterprise Risk Register

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Integrated Performance plan

HSE

Plan

2010

• Strategy• Noreco experience• Industry learning's

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From Vision to In house Emergency organization

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Noreco’s vision is to build a leading independent oil and gas company in the North Sea.

■

Noreco is recognized as a leading company within HSE

and will strive towards our HSE vision

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This is reflected in the in house

Noreco Emergency Preparedness Organisation

•

Staffed with and lead by Noreco employees•

4 teams•

Backed up with some consultants

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Vision

■

Policy

■

Emergency preparedness

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Builds competence, creates ownership –

strengthens culture

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Emergency Preparedness

Noreco 2nd line■

4 teams (increased from 3 in 2009)■

8 roles: •

Noreco pers;-

EP leader, Drilling, HR, HSE, PA and Adm.support

•

Contractor;-

Doctor, Logistics

Training and DrillsTRAINING■

General emergency preparedness training■

Training in proactive emergency preparedness ■

Run through of the drilling program■

Role and team training in computer program■

Media training for liaison and 3rd line■

NOFO course for HSE role■

Involve reception in drills■

NOK course for HR role and NoK

support team.

DRILLS■

Table-top drills for all teams ■

Two drills for all teams before operation■

Rig owner, liaison, 3. line and NOFOs

participation on one drill■

Mustering drill (phone test)■

In case of late operation, one additional table-top and drill■

Internal requirement to members of emergency preparedness organization

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Participation in minimum one table-top and one drill before operation

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Challenges as a “new player”

■

Manage to both challenge and contribute•

Not just taking a seat at the table but also adding to the process

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Independent evaluation of risks•

Not enough to rely on the operators assessment •

Financial risk to the company is the same if we operator or are a partner

■

Train license representatives•

Three priorities –

HSE, technical, financial•

An element in building the Noreco culture

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We learn from other companies, partners and authorities •

Audits of our systems are beneficial•

Best practices brought in with new employees•

Integrate ideas from partners and contractors

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Managing Major Accident Risk

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A humble approach•

Acknowledge risks and our limitations

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The right competence, the right capacity and the right culture•

Sufficient manning levels (recruit in advance)•

Staff with broad expertise and long experience

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Develop the employee•

Training and education of employees -

build the Noreco culture

■

Involvement from the Management Team and the Board•

Short decision line

■

Close cooperation and open communication with other companies, partners and authorities

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Is there a difference in handling major accident risk with a “new player”?■ No

•

same responsibilities as all other partners•

highly competent work force•

developed management system, vision, values, procedures and processes

•

and ……

■ Yes•

we are a new company –

we must develop our culture•

short decision lines from rig floor to board of directors•

integrate expertise from outside the company (partners, contractors, authorities) in to our plans

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Thank You