Lloyd’s Register forms energy risk business
Feature Articles, Nov  27  2009 (Digital Energy Journal)

- The Lloyd’s Register Group, a global organisation with some 232 offices worldwide that helps oil and gas, power and manufacturing companies assess and manage their risks, has merged its Oil & Gas and Chemicals & Power divisions to make a new division devoted to the global energy industry.

1,900 people are now working for the new combined division (out of 7,500 in the whole Lloyd’s Register Group). It includes human factors specialists (including psychologists); geologists; statistical engineers; mechanical engineers; process engineers; inspectors and surveyors.

The main locations for the energy business are Houston, Kuala Lumpur, Shanghai, Mumbai, Perth, Rio de Janeiro, Rotterdam, Aberdeen, Coventry and London. It helps manages risk for 80 per cent of platforms in the UK sector of the North Sea.

The combined business brings together the group's capability in upstream, downstream, power and manufacturing (equipment and component manufacturers) sectors of the energy industry.

Having expertise in manufacturing is important for upstream risk management because some of the biggest risks on offshore applications is in the equipment which is delivered to them, which is often manufactured in parts of the world where quality is hard to monitor.

“We’re focussing strongly on the manufacturing that comes into the supply chain, the factories and welding shops,” says Iain Light, Group Energy Director of Lloyd’s Register. “It’s no good just having an ISO certificate,” he says. “A quality system is no guarantee of a finished product."

The Lloyd's Register Group also wants to be able to help companies manage risks in the entire lifecycle of energy assets, from original plant design, to equipment manufacturer, operations and maintenance, to end of life extensions and decommissioning.

It is also focusing on the human factors of plant operations, which are increasingly the biggest factor in safety. It acquired a company in August 2008 called Human Engineering Ltd, which specialises in risk management around people.

Altogether, its energy business has been growing 40 per cent per year for the past two years, Mr Light says.

The services include helping companies comply with regulations, providing technical consulting looking at every part of a business's operations and working out specific solutions.

The company is broadening its services to help determine the reliability of equipment, following its acquisition of Moduspec in January 2008, a company providing rig inspection and risk management services.

There will be particular emphasis on projects to extend the life of the industry's existing assets, helping to ensure they are safe and reliable.

“Asset integrity is very much on the agenda. We have to make sure that senior management understand asset integrity. We feel we need to do more work here to draw people’s attention,” says Mr Light.

Assessing the integrity of the asset can be much more difficult than assessing occupational safety. “It’s very easy for senior managers to go on platforms and check people are doing the right things,” says Nick Jackson, head of consulting. “It’s a lot more difficult to assess corrosion and decide if that is acceptable.”

Good enough?

The oil and gas industry’s safety record in Aberdeen is already respected all over the world, which raises questions of how to get to the next level – and there are also concerns whenever assets are sold by oil majors to smaller companies, or when people try to get more life out of assets than they were designed for.

The two main databases of statistical accidents in oil and gas both agree that performance in occupational safety (safety of the working environment) is continuing to improve, says Nick Jackson, head of consulting with Lloyds Register Energy.

But there is roughly the same number of major incidents every year, and the cost of them is rising exponentially, he said. “The major accidents change things overnight.”

Lloyd's Register

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