Evolution Of Oilfield Contractor Safety Explained In One Graph

Working safely is a good thing.   Jumping through hoops to convince an oil and gas company you are working safely can be a hassle. One of the things you frequently hear from contractors in the oil and gas industry is how much more oversight they are getting from their  operator customers.

They are right.  It is.   It has to.  Here is why:

OGP Data Series: Safety Performance Indicators – 2012 Data

The  International Association of Oil and Gas Producers (OGP) represents on and offshore oil and gas companies.  One of its services is to keep worldwide statistics on safety.  The report is worth looking at and benchmarking against.

The graphic above represents how much work offshore is done by oil company employees vs. how much work is done by contractor personnel. Operator employees worked about 750,000 hours and contractors worked nearly 3 million hours …about a four to one ratio.   While it is not the focus of the study, the change over time should grab your attention.  Back in 2000, the different between contractor hours and operator hours was a little more than 2-to-1.    But then the use of contractors starts to climb rapidly.

Chances are great that some of the difference is that OGP has improved its sampling data.   But even taking that into account, what this shows is an industry in a rapid transition.    Within a short 10 years, upstream oil and gas has moved from a model when the host company used its own employees to do a large percentage of its work to one that brings in outside companies to do most of its work.

That has changed oil and gas in fundamental ways that we are only now coming to grips with, including in the area of safety.   The focus of oil company safety divisions has shifted from managing internal safety programs to managing a mix of internal programs with a large chunk of overseeing contractor safety.

And the flavor of that oversight differs from region to region.   In some areas, like the U.S., contractors may bring more expertise than the operators to a specific type of operation.  In other areas, using outside contractors is mandated by local content laws, designed to bring that expertise to a local population.   In some cases, the operator is a kind of virtual company, bringing in outside personnel for the vast majority of its hands-on operations.

In any event, the change has already taken place and now industry is really reacting, trying to come up with the right system to make it all work.    If you doubt that, look at how bumpy the process of managing contractors under SEMS has been.

So for contractors- yes, customer oversight is on the rise.   And, ready or not, it is the future of the industry.

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