Oil and Gas E&P Lifecycle
The treatment of risks needs to be understood across the life cycle of a project, in doing so organizations are better to understand the costs and impacts that these risks have on their bottom line, and reflects in the HSE strategies and programs that are necessary for implementation. The oil and gas business is, by nature, long-term and our approach covers every stage of the oil and gas life-cycle and is outlined below.
1. Due diligence
Before making an acquisition or investment, applying for an exploration license or farming-in to an existing project, companies carry out extensive risk-screening process which includes assessing whether there are potential health and safety, social, human rights, political, corruption, security or environmental impacts. This is used in decision-making on whether or not to proceed and if an investment goes ahead it informs approaches to risk management going forward.
2. Pre-qualification
When applying for an exploration license, the necessary documents are submitted to the relevant authorities. Typically this includes information about the company's legal status, financial capability, technical competence and plans to manage health, safety, and environmental risks, and contributions to local economic development.
3. Exploration and Seismic
Once the organization has been awarded the right to explore in a certain area, they will generally carry out seismic surveys to develop a picture of geological structures below the surface. This helps identify the likelihood of an area containing hydrocarbons. Seismic surveys are usually preceded by an assessment of environmental, social and human rights impacts, which are managed through the Project Delivery Process (PDP).
4. Site Survey
Before commencing any drilling activity, site surveys are carried out to gain more detailed information on the area where an exploration well may be drilled, and to confirm that the selected drilling location is safe and that any sensitive environments can be avoided.
The process normally involves taking geological samples from the seabed and carrying out shallow seismic surveys. These activities have low social and environmental impacts and therefore usually do not require a separate Environmental Impact Assessment (EIA) or Social Impact Assessment (SIA).
5. Exploration Drilling
Exploration wells are drilled to determine whether oil or gas is present. This phase can be accompanied by a step-change in activity and visibility to local people as offshore exploration can involve a drilling rig, supply vessels and helicopters for transporting personnel.
Exploration drilling is preceded by an assessment to understand potential health, safety, environmental, social, security and human rights impacts. These assessments identify appropriate steps to reduce impacts, manage risks and assist in operating responsibly. Limited community development programmes may also be put into place at this time depending on the nature of the programme.
6. Appraisal Drilling
If promising amounts of oil and gas are confirmed during the exploration phase, field appraisal is used to establish the size and characteristics of the discovery and to provide technical information to determine the optimum method for recovery of the oil and gas. The potential social and environmental impacts associated with appraisal drilling are comparable to exploration drilling, and similar assessments are carried out in advance.
7. Development
If appraisal wells show technically and commercially viable quantities of oil and gas, a development plan is prepared and submitted to the relevant authorities for approval. This includes a rigorous assessment of all the potential risks and a long-term assessment of environmental and social impacts covering a timeframe of between 10 and 30 years. The plan will also detail projected benefits to local communities, for example, employment and supplier opportunities, as well as proposing how to manage potential impacts such as an influx of workers from outside the local community. At this stage, good design is important to remove and mitigate risks to an acceptable level as well as managing construction and installation in a manner to likewise minimize impacts.
8. Production
A variety of options are available for the production of oil and gas. During this phase, which can last many decades, regular reviews are made of social and environmental performance to ensure that impacts identified in the assessments are mitigated. Changes in the risks associated with activities are assessed throughout the production period. Safe operations remain an ongoing requirement at this stage, which means personnel are competent and good HSE behaviors are in place and equipment is properly maintained and operated.
9. Decommissioning
This phase occurs when hydrocarbons can no longer be extracted safely or economically at the end of any field life-cycle. Decommissioning consists of closing operations in a manner that protects people and the environment and to avoid unacceptable legacy issues for local stakeholders and the organization.