Sustainability, as a holistic concept, reflects the current trend towards safeguarding our world. Though traditionally associated with environmental issues, the definition of sustainability has expanded to encompass the entire social and environmental footprint of a company’s operations, from safety and environmental performance to asset productivity and capital effectiveness. Galp Energia, a Portuguese integrated oil and gas operator, has become one of the most highly valued and sustainable brands in the Iberian Peninsula. The company extracts oil from four continents, delivering energy to millions of customers. Working with such high hazard materials makes process safety management (PSM) a critical issue for Galp. Indeed, in 2004, during a major revamp of the Matosinhos Refinery pipelines near Porto, a residual quantity of naphtha, a highly flammable liquid, ignited damageing other pipelines and igniting other fuels. Although no one was seriously injured, the incident badly affected the company’s image and its ability to perform sustainably in the future.
The subsequent investigation of the incident clearly revealed gaps in process safety management and identified several points of major concern in relation to contractor management practices, safety procedures – line breaking operations and hot works in particular - as well as operational discipline. The board of Directors also believed that Galp’s HSE management system needed improvement.
“Each of us must integrate safety in their daily operations to improve our overall HSE performance and ultimately reach our goal of zero incidents. This is the only way we can ensure a sustainable future for our company and promote an excellent corporate image.”
André Ribeiro, Executive Board Member of Galp Energia
Since 2000, Galp Energia has expanded its operations substantially through acquisitions in Iberia and selected African markets to become a multi-business corporation in the energy sector combining different cultural backgrounds, company histories and safety management practices. This made the challenge of improving process safety management even more difficult.
Initial Assessment Reveals Gaps
In 2005, Galp Energia asked DuPont - a company with a long-established safety methodology and expertise in the oil and gas industry - to assess its safety culture and benchmark existing safety practices against industry standards. DuPont consultants conducted an initial evaluation via plant visits and interviews with the workforce and management across all business units in Portugal where the company operates two refineries, the Matosinhos site near Porto and another in Sines, 200 kms south of Lisbon. The assessment revealed a lack of clearly established process safety procedures, no strong commitment by leadership to safety and more fundamentally no integrated HSE culture across the newly extended organisation. Indeed, senior management did not adequately demonstrate their commitment to safety and while most employees and contractors understood the importance of safety, they did not feel accountable for it. The knowledge and capabilities to prevent accidents laid solely within the HSE department. Furthermore, there was an absence of clear frameworks for implementing safety in workplaces; and even more importantly, there was insufficient measurement of safety performance – the company did not report incidents relating to contractors or measure safety leading indicators.
When Galp Energia decided to float on the stock market in 2006, world-class safety and environmental performance became even more important, not only to preserve the lives and physical well-being of employees and contractors as well as the company’s assets, but also to meet the expectations of shareholders and communities in terms of overall sustainability and long-term security of its people.
Organisational change and extensive training close gaps
Based on the initial assessment, Galp Energia and DuPont consultants jointly developed an overall plan in 2006 to implement an integrated HSE management system and change Galp’s safety culture, both considered as the necessary basis for setting up good process safety practices. The new HSE management system, based on the 22 elements of the DuPont safety model, included the creation of an integrated organisation led by each department manager and reporting to the board of Directors, as well as the redefinition of HSE responsibilities in all activities, including contractor management. HSE Committees were created to act as monitoring, analysis and decision-making forums and Excellence Groups, reporting to these committees, were set up to address specific HSE issues. In addition, a comprehensive set of internally developed company safety and process safety standards were developed setting the corporate expectations in response to the 22 elements management system requirements.
As good leadership is critical for process safety management to function well - employees need to see that time and effort are dedicated safety - Galp Energia conducted an extensive training and coaching programme involving more than 3,500 employees at supervisory level. Managers were coached in the benefits that good safety practices have on a company’s bottom line, what their role and responsibilities are in terms of leading safety in the organisation, and how crucial it is to clearly demonstrate their commitment to safety. In addition to this “soft” approach, detailed and more technical sessions were conducted at the appropriate levels to introduce the newly required operational standards defined and promoting its practical introduction at the shop floor of all units.
Between 2006 and 2010 the total amount of training hours exceeded 25,000.
Galp also set up a two-way communications system to share good practices with both its own staff and contractors, so as to be alerted of any incident occurring either within the company or in the industry. In addition, the company launched a corporate communications campaign to promote line accountability, incident investigation and reporting, and operational discipline among staff and contractors. As behaviour is essential to any cultural change, the joint Galp-DuPont team also developed a behavioural auditing system to help Galp managers identify misconduct in work practices, misused PPEs or tools, as well as missing or incorrectly followed procedures.
Process Safety Management builds on good safety foundation
Once the major cultural gaps had been closed and the foundation of good HSE management systems had been set, Galp was able to address the more technical and risk based items that PSM encompasses. Indeed, although PSM was defined as one of the 22 elements in the initial deployment plan in 2006 people needed to get used to the discipline that behavioural safety management instils before they took the habit of following procedures.
The company defined specific key performance indicators (KPI) for PSM and began monitoring all process-related incidents and accidents via audits. Tier 1 and Tier 2 PSM indicators were set to track serious loss of containment events and are reported to industry association Concawe. Galp also started following DuPont core PSM tenets focused on elements such as mechanical integrity, process hazard analysis, management of change, pre-start-up safety reviews, and emergency planning and response. Although the level of implementation of these elements still varies from one business to another, there are now common requirements across the whole organisation. The company also trained staff to identify, evaluate and manage process hazards at the various stages of equipment lifecycle. In addition, every manager now has key performance indicators related to the HSE performance of their own business, and all employees including contractors are actively encouraged to report near-misses and minor incidents - a proactive form of investigation to avoid the recurrence of incidents. As a result, by the end of 2010, Galp managed to reduce serious process safety incidents across its businesses. While it has not yet achieved its goal of zero incidents, the company now believes this is achievable.
International recognition for continuous improvement Within four years, Galp Energia’s HSE performance improved considerably. The company’s Lost Workday Injury frequency LWIF rate dropped from 3.4 in 2008 (the start of incident data collection for both staff and contractors) to 2.1 in 2009. This rate further decreased by 40% between 2009 and 2010 to an LWIF of 1.2. As Guido Albuquerque, Galp Energia HSE & Quality Corporate Manager, said, “Although Galp Energia had to report a fatality in 2009 the company achieved a world class LWI frequency rate. Our company was also recognised by the International Expansion Project Contracting companies.”
This improvement is even more spectacular considering that, in 2010, the level of risk at the company increased because of the set-up of a new hydrocracker unit at the Sines refinery, as well as new vacuum and visbreaker units at the Matosinhos refinery. The increasing number of reports in the last three years, especially for minor incidents and near misses, also reflects a significant improvement of the reporting process and a better understanding by all employees of the value of reporting to prevent the recurrence of incidents.
According to Helder Figueira, one of the main DuPont consultants working on the project, “Galp Energia managed to improve its process safety management system through a complete reorganisation of its HSE line management and structure responsibilities. This lead to an increased commitment by all managers and a significant change in employee and contractor attitude to safety and behaviour. An essential aspect of Galp Energia’s cultural change is that safety - like environmental protection - is now integrated as a business core value.”
Galp’s plans for the future
As PSM is a clear focus area, Galp Energia intends to continue with current activities in order to meet the international standards of process safety guidelines. It plans to extend its current monitoring system to Tier 3 and Tier 4 indicators in order to track not only serious loss of containment events but also other events and near misses that can lead to undesirable incidents.
The good safety performance achieved has encouraged Galp Energia to expand the acquired safety management expertise to other countries where the company operates, starting with Fuel Distribution activities in Spain and Exploration & Production in Brazil. The Spanish operation has received training and is currently reporting and investigating accidents the same way as in Portugal. “Although we still have a long way to go, we strongly feel that the level of operational discipline we have achieved has deeply changed the way we work and improved our overall efficiency. This project was a catalyst and the expertise we developed in process safety management can now be applied to all areas of the group to help us achieve internal sustainability and promote an excellent image of our company,” Guido Albuquerque concluded.
Galp Energia is a Portuguese oil and natural gas integrated operator. Its activities span the exploration and production of oil, refining and marketing of oil products, natural gas, power generation plants and electricity. With refining and marketing activities concentrated on the Iberian Peninsula, the company has a strong presence in the South Atlantic area that covers Brazil’s pre-salt Santos basin and the Angolan offshore. Galp Energia is a public company employing 7,311 people in 13 countries.