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Safety is not expensive, it is priceless!, Hirak Dutta, Executive Director, Oil Industry Safety Directorate (OISD)

20 Dec 2012

India has one of the densest oil and gas installation network in the world, both upstream and downstream. Managing safety of these installations is no mean task. As safety is of paramount importance, there is a move within the government to give more teeth to the Oil Industry Safety Directorate (OISD) by converting it into a statutory body. OISD’s Executive Director, Hirak Dutta talks to Neeraj Dhankher on what needs to be done to make installations safe and reliable. Excerpts:

What is the status of talks over granting statutory status to OISD?

Talks are going on to provide statutory power to OISD, particularly for the downstream sector, by transferring part powers of the Petroleum and Explosives Safety Organisation (PESO) related to the petroleum sector. Currently, we have statutory power in upstream offshore as per petroleum rules, but we don’t enjoy a similar power in the downstream sector, although there are a total of 111 safety standards of OISD (of which 11 are mandatory) which are part of petroleum rules and are to be followed in the entire hydrocarbon value chain.

OISD is a technical wing of the ministry and is managed by people deputed from oil companies. We don’t have a regular cadre of OISD. Our infrastructure is not spread out across the country. Once we have the statutory power in the downstream sector as enjoyed by PESO, we need to have adequate infrastructure and manpower. Therefore, the entire aspect needs to be studied by a consultant to firm up requirements for manpower, infrastructure and other areas. We have broadly finalized the terms of reference and by November 2012 we will be able to line up the consultant. Thereafter, the findings of the study upon submission of consultant’s report have to be discussed with Petroleum Ministry, DIPP and PESO. The consultant will not look at the legal aspects.

Once OISD is made a statutory body, what will be its implications on the oil and gas sector?

Even today we have the technical competence in monitoring safety practices in the petroleum industry. Therefore, since we make standards, once we have statutory authority, the overall objective of enhancing safety in oil installations can be achieved. 

At the moment, out of 111 OISD standards, 11 standards are mandatory in nature. These have to be followed by oil companies in the hydrocarbon sector. Even in case of other standards, there is a broad acceptance and oil companies do follow them strictly.

To make standards mandatory, we have to take the approval by the Safety Council which is headed by Secretary, Ministry of P&NG and its members include heads of private and public companies and other statutory bodies these are to be included in petroleum rules.

Are OISD standards applicable to private companies as well?

Earlier these standards were not applicable to private companies. But now both public and private companies come under the gambit of OISD’s safety audit. For example, we have audited RIL’s Jamnagar refinery complex and HMEL’s refinery at Bhatinda for precommissioning checks. Similarly we have carried out audits of private sector companies in oil exploration & production.

We carry out External Safety Audits, Surprise audits and Precommissioning audits for both private and public sector. The aim of these audits is not to find faults but to actually bring out some of the weaknesses in the system which might have escaped the attention of the company and thus improve upon it so as to fulfill the goal of energy security. So these audits are focused to help the oil companies. These audits are conducted under a favourable environment where the oil companies are receptive to our suggestions and whatever observations are made by us are adhered to.

Once statutory status is granted to OISD, do you think there will be any overlap in functioning with PESO?

I don’t think so. As once petroleum functions of PESO are given to OISD, I don’t think there will be much of a problem. But process of transfer will take some time after detailed deliberations at appropriate levels.

How does OISD reward top performers? Do you also have any mechanism to deter companies from violating safety guidelines?

We have both. We present oil industry safety awards every year to companies that meet and qualify our safety performance parameters. All companies submit the data to us. We have a committee, which examines the various safety parameters in great detail. Based on that, companies are rewarded, both public and private. We are also encouraging individuals. For the last two years we are giving awards to individuals who have made significant contribution for enhancing safety in their installations.

Similarly, about deterrence, when we find some installations are violating or not meeting OISD standards, we take up the issue with respective oil companies. There have been instances where oil installations have actually been stopped at the site, relocated or taken appropriate measures immediately to correct the situation.  

Does OISD have a role in monitoring safety practices before the actual project execution takes place?

Safety is inbuilt in design. When a new refinery is coming up, the process licensor in the design incorporates various safety features. Various safety considerations pertaining to process, instrumentation, process safety interlocks based on HAZOP and HAZARD study are incorporated in the design. The mechanical standards following API, ASEM standards are followed. In case inbuilt safety features in design fail, there is secondary system like fire fighting which helps in mitigating the unsafe situation. Therefore, the important part is safety during design stage. Oil companies in India have a very robust system. Now days, we have a 3D model review of P&I diagrams by multi-disciplinary group, along with process licensors and consultants. 

Please explain how safety audits are conducted by OISD?

We have three kinds of audits- the External Safety Audit, Surprise audit and Precommissioning audit. The external audits are carried out once in three years, while in case of surprise audits, we don’t tell the installations about the audit. We go randomly to check whether they are following OISD standards. Precommissioning audits are conducted at the request of the oil company when its plant is ready for commissioning. The ESA team is also highly experienced team of 5-6 people. Each year, we have Safety Council meeting where we discuss the number of audits to be conducted every year.

Along with OISD audits, oil companies also carry out their respective internal audits to correct deficiencies, if any.

There have been cases when the oil companies have found to have violated OISD’s recommendations. Why is it so?

It is not willfully they do not do it. If you look at the history of many installations, some have come up two to three decades back. The technology is constantly being upgraded. Design has changed a lot over the years. When we go and audit old and aging installations, we make some recommendations which were not incorporated in design at that point of time. Therefore those changes have to be incorporated now. It is not that oil companies do not do it, just that it takes time. Refining, Exploration & Production operation is highly complex and any technology up-gradation is a time consuming process.

Do you think that in India we attach the same importance to safety as in developed countries like USA?

I can tell you that safety standards in India are robust. But one shouldn’t compare India with that of other country as environment and work culture are different. We take inputs from other international standards, technological developments taking place and we have principal panellists from various public and private companies who sit over a period of time before a safety standard is made. So there is an elaborate process of formulating a standard. Standards in India are quite good and they are also followed religiously to the extent possible. There will always be some gaps in any system, be it in the East or West. There has been lot of improvement in safety culture in India. Managers are looking at operational integrity, asset management integrity and hardware and software issues.

Don’t you think that OISD’s decision to make standards 116 and 117 mandatory was a controversial one as oil companies were asked to replace existing fire fighting systems with new ones leading to unnecessary expenditure? Please elaborate.

With technological developments you have to undertake modifications, put new systems. In today’s era of technological developments you can’t look back at what has been done earlier. As and when technology improves we have to bring in new features. That’s what happens universally. As per me there was no controversy. In some areas there were some deliberations and debate and we have included their feedback based on discussions in Safety Council. Sometimes someone creates some noise which is blown out of proportion. The Safety Council approves the standards only after building a consensus with oil companies and statutory bodies. We are not saying that perfectly functioning equipment should be replaced with the one mandated by the standards. Infact, the oil companies themselves are more sensitive than OISD as their stakes are very high. Hence whatever technological advancements we suggest, or otherwise also, the oil companies incorporate changes in their process. Acquiring state-of-the-art technology is a must for improving production, profitability and safety. And as per me, there are no differences of opinion on this. Safety is not expensive, it is priceless.

There are enough suppliers in the market to procure the equipment recommended by us. Amendments are done from time to time. This world is a changing world; only thing which is constant is change. Developments in science and technology move at a rapid pace, and we have to catch up and incorporate those.

With the MB Lal committee coming out with its own set of safety recommendations for oil and gas industry, how has it impacted OISD’s owns set of guidelines?

The MB Lal Committee was set up in the aftermath of a fire incident at IOC’s Jaipur POL terminal in October 2009. The committee had recommended various safety measures. Around 70% of its recommendations have been implemented so far and the balance is under various stages of implementation. Based on these recommendations, OISD has also modified its standards to incorporate some of the measures which were not included previously.

What, according to you, are the key challenges in the functioning of OISD today?

Managing rapid changes in technology up gradation, dealing with old and aging assets and thick population growth around installations are some of the major challenges faced by oil & gas industry. Upgrading skill is another important issue, along with assimilation of technology. After all it is the people who manage the technology. Employee engagement is a must.

(InfralineEnergy thanks Hirak Dutta, Executive Director, Oil Industry Safety Directorate (OISD) for sharing his valuable insights with our readers. The column 'In-Conversation', is a platform to engage experts from various sectors to share their views on the different transformations happening in the Indian energy sector.)