New research from DNV GL on the outlook for the oil and gas industry in 2018 shows that there are expectations for digital technologies to help bridge the gap between long-term cost efficiency and enhanced safety in projects and operations.
The research from DNV GL reveals that 46 per cent of senior professionals in the sector believe there has been underinvestment in inspection and maintenance of infrastructure and equipment in recent years. Just a quarter (28 per cent) said that they expect to increase spending on safety in 2018. 61 per cent will maintain current budgets and 5 per cent plan to cut investment.
The findings appear in The State of Safety, a special report from DNV GL’s research on the outlook for the oil and gas industry in 2018. The findings are based on a survey of 813 senior sector players.
While cost efficiency has been the top, or a high priority, for more than 82 per cent of senior industry professionals since 2015, 40 per cent of respondents believe digital tools and technologies have already improved safety over the past three years.
“The industry’s strong focus on cost control must continue in the long term for oil and gas to remain competitive and play an increasingly important role in the energy transition. However, our research confirms the sector’s clear belief that cost control must never come at the expense of safety,” said Liv Hovem, CEO, DNV GL – Oil & Gas.
“At DNV GL, we believe that digital technologies will be crucial to enhancing safety practices and improving hazard management. These will enable more effective and transparent risk communication across all levels of an organization as well as between multiple parties involved in projects and operations. We are investing in this field,” Hovem added.
Many new investments in safety will be aimed at digitalizing safety monitoring, processes and responses this year. For example, DNV GL’s MyQRA service draws on data from quantitative risk assessment (QRA) reports to create a single source of safety data that can help all stakeholders better understand important safety signals, make decisions and predict future outcomes.
DNV GL’s The State of Safety report also highlights the risks that implementing digital technologies can have on operations, particularly around cyber security. It concludes that existing guidelines and standards may not be sufficient to demonstrate the safety of new concepts.
The company is leading a joint industry project with a consortium of eight companies and two Norwegian universities to tackle the issue. Safety 4.0, due to begin this year, aims to develop a best practice framework to safely and securely introduce new technology solutions to the subsea sector.
Other key findings from DNV GL’s The State of Safety report:
- Twice as many engineers and technical specialists (28 per cent) as business leaders (15 per cent) believe that stringent cost control has affected safety levels in the sector
- More than a third (38 per cent) of those questioned stated that safety management is effective and does not need to change. Just 26 per cent of those questioned disagreed
- 47 per cent of Chinese respondents say their organization will be increasing spending on safety in 2018, compared with 27 per cent in the US, 19 per cent in Norway and just 14 per cent in Australia
- Downstream respondents currently expect the highest increase in safety spending (41 per cent), compared to other parts of the industry.
About the report
The report is based on a global survey that incorporates the views of 813 senior industry professionals, conducted during October and November 2017.
The companies surveyed vary in size: 44 per cent had annual revenue of USD500m or less, while 21 per cent had annual revenue in excess of US$5billion. Respondents were drawn from across the oil and gas value chain, including publicly listed companies and privately held firms. They also represent a range of functions within the industry, from board-level executives to senior engineers.
Download a copy of The State of Safety from: dnvgl.com/industryoutlook2018