Sverre Haver, Statoil, February 2007

1. Rules and Regulations enforcedby Petroleum Safety Authority Norway (PSA) at the Norwegian Continental Shelf Sverre Haver, Statoil, February 2007 Presentation is to a large extent based on presentations held by Geir Løland, Statoil, at several occasions.

2. Design of Structures – an illustrative overview  A sufficient knowledge of rules and regulations are necesssary toensure that the designed structure fulfils overall requirements regarding health, environment and safety

3. Implementation of PSA’s HSE regulations • All operators have to establish a Management and Control System which verifies that the PSA regulations are properly implemented • The design and operation of all offshore facilities in Norway shall be in compliance with PSA’s regulations. • Definition of HSE in PSA’s regulations: • “ … These regulations encompass safety, working environment, health, the external environment and economic assets (including production and transport regularity - operational availability)…… ”

4. Development in HSE Regulations for offshore activities on the Norwegian Continental Shelf • PSA (PTIL) – Petroleum Safety Authority in the main HSE regulation body. • NPD (OD) -The Norwegian Petroleum Directorate is responsible for: • RESOURCE MANAGEMENT REGULATIONS and THE MEASUREMENT REGULATIONS • Development of HSE regulation regime: • 1970 – 1980 • young industry and detailed technical regulations • 1990 – 2000 • maturing industry, less technical regulations and more references to recognized industrial standards • 2000 – • Mature industry, functional requirements and extensive use of recognized national and international standards (ISO, API, NORSOK etc.) Increased focus on safety management systems • Authorities and industry work together to develop modern regulation regime • Government and industry trust each other, and work for the common goal of a safe and sustainable oil industry

5. HSE regulations aims towards preventing:

6. Acts / Laws Regulations Guidelines Standards Company internal requirements Norwegian regulation hierarchy Lysark tatt fra RVK kurset 6

7. Health care acts Other acts. Petroleum act Working env. act Pollution act REGULATIONS RELATING TO HEALTH, ENVIRONMENT AND SAFETY IN THE PETROLEUM ACTIVITIES (THE FRAMEWORK REGULATIONS) Management reg. Information reg. Facility reg. Operation reg. Appendixes Guidelines International and national standards Company requirements HSE regulation hierarchy Lysark tatt fra RVK kurset 7

9. REGULATIONS RELATING TO HEALTH, ENVIRONMENT AND SAFETY IN THE PETROLEUM ACTIVITIES THE FRAMEWORK REGULATIONS

10. CHAPTER 1 INTRODUCTORY PROVISIONS § 1 Purpose § 2 Scope of application etc. § 3 Use of maritime legislation in the petroleum activities § 4 Definitions CHAPTER II TO WHOM THE REGULATIONS ARE DIRECTED AND REQUIREMENTS TO EMPLOYEE CONTRIBUTION § 5 Responsibility according to these regulations § 6 Arrangements for employee contribution CHAPTER III PRINCIPLES RELATING TO HEALTH, ENVIRONMENT AND SAFETY § 7 Use of the principles of Chapter III § 8 Prudent petroleum activities § 9 Principles relating to risk reduction § 10 Organisation and competence § 11 Sound health, environment and safety culture § 12 Health related matters CHAPTER IV MANAGEMENT OF THE PETROLEUM ACTIVITIES § 13 Duty to establish, follow up and further develop a management system § 14 Qualification and follow-up of other participants § 15 Verifications § 16 Use of the Norwegian language CHAPTER V MATERIAL AND INFORMATION § 17 General requirements to material and information § 18 Documentation § 19 Documentation in the early phase § 20 Matters relating to health, environment and safety in the plan for development and operation of petroleum deposits and the plan for installation and operation of facilities for transport and utilisation of petroleum § 21 Application for consent § 22 Decommissioning plan § 23 Publicly available information on safety CHAPTER VI DESIGN AND OUTFITTING OF FACILITIES ETC. AND CONDUCT OF ACTIVITIES IN THE PETROLEUM ACTIVITIES § 24 Development concepts § 25 Data on natural conditions § 26 Placing of facilities, choice of routes § 27 Duty to monitor the external environment § 28 Use of facilities § 29 Co-ordination of emergency preparedness § 30 Co-operation on emergency preparedness § 31 Safety work in the event of industrial disputes THE FRAMEWORK REGULATIONSTable of content (1of 2)

11. CHAPTER VII SAFETY ZONES § 32 Relationship to international law § 33 Establishment of safety zones § 34 Establishment of safety zones for sub sea facilities § 35 Specific safety zones established in situations of hazard and accident § 36 Requirement to impact assessments etc § 37 Revocation of safety zones § 38 Monitoring of safety zones § 39 Alert and notification in connection with entry into safety zones § 40 Measures against intruding vessels or objects § 41 Marking of safety zones § 42 Announcement of safety zones CHAPTER VIII SPECIAL RULES ACCORDING TO THE WORKING ENVIRONMENT ACT § 43 Several employers at the same workplace, general § 44 Several employers at the same workplace, principal enterprise § 45 Joint working environment committees § 46 Right of the responsible safety delegate to stop dangerous work § 47 Ordinary working hours § 48 Plans of working hours arrangements and periods of stay § 49 Travel time and working hours § 50 Rest breaks § 51 Overtime § 52 Periods of stay § 53 Off-duty periods and time off § 54 Minimum age CHAPTER IX CLOSING PROVISIONS § 55 Supervisory authority § 56 Authorities’ access to facilities and vessels § 56A Administrative proceedings and duty of secrecy § 56B Observers § 57 Regulations § 58 Individual decisions § 59 Exemptions § 60 Training of civil servants § 61 Appeal § 62 Sanctions § 63 Entry into force, repeal of regulations and transitional arrangements THE FRAMEWORK REGULATIONSTable of content (2of 2)

12. Framework reg. § 1 Purpose “…… • The purpose of these regulations are to • a) further a high level as regards health, environment and safety in the petroleum activities, • b) achieve a systematic implementation of measures to fulfil the requirements and reach the objectives set out in the legislation relating to health, environment and safety, • c) further develop and improve the level as regards health, environment and safety ……..” “ … These regulations encompass safety, working environment, health, the external environment and economic assets (including production and transport regularity - operational availability)…… ”

13. Framework reg. §3 Use of maritime legislation in the petroleum activities “With regard to mobile facilities registered in a national register of shipping, and which follow a maritime operational concept, relevant technical requirements contained in rules and regulations of the Norwegian Maritime Directorate in the form following the amendments in 2003, together with supplementary classification regulations issued by Det norske Veritas, or international flag state rules with supplementary classification rules achieving the same level of safety, may be used as an alternative to technical requirements laid down in or pursuant to the Petroleum Act, with the following specifications and limitations: • a) this section only comprises provisions on matters of a maritime nature which are • not directly connected with the petroleum related function which the facility is intended to carry out. The section does not comprise provisions on • drilling and process equipment, • universal sound and light alarms, • equipment used for transportation of personnel and requirements to transportation of personnel on the drill floor, • other provisions on the working environment, • the activities to be carried out in the petroleum activities, • b) the facility must be used in a way that makes it possible to use a flag and or classification practice implying a calendar based recertification, including five-yearly main survey, • c) the operational assumptions on which design, fabrication and operation are based shall be clarified, • …………”

14. Definition of ship versus mobile units versus permanent facilities Ship: Example shuttle tanker Follow Maritime Regulation .. Mobile units: Drilling rigs, well intervention vessels etc operating at a location for a limited timeMay follow a recognized maritime regulation Permanent installations, e.g. floating production units: Follow PSA regulation

15. “The operator and other parties participating in the petroleum activities are responsible according to these regulations and regulations issued pursuant to these regulations. The party responsible shall ensure that requirements specified by the legislation relating to health, environment and safety are complied with. The operator shall see to that anyone carrying out work for him, either personally, by employees, contractors or sub-contractors, complies with requirements specified by the health, environment and safety legislation. In addition to the duties imposed on the licensees according to individual provisions contained in these regulations, the licensees are responsible to see to it that the operator complies with requirements specified by the health, environment and safety legislation. The employees have a duty to contribute according to the Working Environment Act Section 16.” Framework reg. §5 Responsibility according to these regulations

16. Employee Contribution

17. Improving of safety In Section 8 it is stated:A high level of health, environment and safetyshall be established, maintained and improved. This is an important message to the operators when it comes to adequatemaintenance of their structures and – not the least – in connection withmajor modification work done on the installations. Over the operationallife of a structure a number of modifications of various scales will typicallybe done. It is important to ensure that such modifications are in conflict with the text of section 8 of the Framework Regulation.

18. Management regulation:§6 Acceptance criteria Facility reg. §8 Qualification and use of new technology and new methods FR§ 9 Principles relating to risk reduction • Harm or hazard to people, the environment or to financial assets shall be prevented or limited in accordance with the legislation relating to health, the environment and safety, including internal requirements and acceptance criteria. Over and above this level the risk shall be further reduced to the extent possible. Assessments on the basis of this provision shall be made in all phases of the petroleum activities. • In effectuating risk reduction the party responsible shall select the technical, operational or organisational solutions which according to an individual as well as an overall evaluation of the potential harm and present and future use offer the best results, provided the associated costs are not significantly disproportionate to the risk reduction achieved. • If there is insufficient knowledge about the effects that use of the technical, operational or organisational solutions may have on health, environment and safety, solutions that will reduce this uncertainty shall be chosen. • Factors which may cause injury, damage or nuisance to people, the environment or to financial assets in the petroleum activities shall be replaced by factors which in an overall evaluation have less potential for injury, damage or nuisance. ALARP BAT Precautionary principle Substitution principle

19. The operator shall establish acceptance criteria for risk relating to major accident and risk relating to the environment. Acceptance criteria shall be established for a) the personnel on the facility as a whole, and for groups of personnel which are particularly risk exposed, b) the loss of main safety functions as mentioned in Section 6 of the Facilities Regulations relating to main safety functions, c) pollution from the facility. The acceptance criteria shall be used in assessing results from the quantitative risk analyses, cf. Section 14 relating to analysis of risk relating to major accidents, Section 15 relating to quantitative risk analyses and emergency preparedness analyses and Section 16 relating to environmental risk and preparedness analyses. Cf. also the Framework Regulations Section 9 on principles relating to risk reduction Management regulation:§6 Acceptance criteria for risk relating to major accident and risk relating to the environment

20. Where the petroleum activities entail use of new technology or new methods, criteria shall be defined with regard to development, testing and use in order to accommodate the requirements to health, environment and safety. The criteria shall be representative of the relevant operational conditions, and the technology or the methods shall be adapted to already accepted solutions. Qualification or testing shall demonstrate that applicable requirements can be met by using the relevant new technology or new methods. Facility regulation:§8 Qualification and use of new technology and new methods

21. Summary • What is meant by HSE in PSA’s regulations? • These regulations encompass safety, working environment, health, the external environment and economic assets (including production and transport regularity - operational availability) • What is most important to account for in design? Health, environment or safety? • Health, environment and safety are of equal importance! • What is meant by ALARP? • As Low As Reasonable Practical +++++ • What is meant by BAT? • Best Available Technology +++++

22. REGULATIONS RELATING TO MANAGEMENT IN THE PETROLEUM ACTIVITIES (THE MANAGEMENT REGULATIONS)

23. CHAPTER I RISK MANAGEMENT § 1 Risk reduction § 2 Barriers CHAPTER II MANAGEMENT ELEMENTS § 3 Management of health, environment and safety § 4 Objectives and strategies § 5 Internal requirements § 6 Acceptance criteria for major accident risk and environmental risk § 7 Monitoring parameters and indicators § 8 Basis and criteria for decision CHAPTER III RESOURCES AND PROCESSES § 9 Planning § 10 Work processes § 11 Manning and competence § 12 Information CHAPTER IV ANALYSES § 13 General requirements to analyses § 14 Analysis of major accident risk § 15 Quantitative risk analyses and emergency preparedness analyses § 16 Environmentally oriented risk and emergency preparedness analyses § 17 Analysis of the working environment CHAPTER V MEASURING, FOLLOW-UP AND IMPROVEMENT § 18 Collection, processing and use of data § 19 Registration, examination and investigation of situations of hazard and accident § 20 Handling of non-conformities § 21 Follow-up § 22 Improvement CHAPTER VI ENTRY INTO FORCE § 23 Entry into force THE MANAGEMENT REGULATIONSTable of content

24. Management reg. §1 Risk reduction “..In risk reduction as mentioned in the Framework Regulations Section 9 on principles relating to risk reduction, the party responsible shall choose technical, operational and organisational solutions which reduce the probability that failures and situations of hazard and accident will occur. • In addition barriers shall be established which • a) reduce the probability that any such failures and situations of hazard and accident will develop further, • b) limit possible harm and nuisance. • Where more than one barrier is required, there shall be sufficient independence between the barriers. • The solutions and the barriers that have the greatest risk reducing effect shall be chosen based on an individual as well as an overall evaluation. Collective protective measures shall be preferred over protective measures aimed at individuals ……”

25. Management reg. §2 Barriers “ ….. • The operator or the one responsible for the operation of a facility, shall stipulate the strategies and principles on which the design, use and maintenance of barriers shall be based, so that the barrier function is ensured throughout the life time of the facility. • It shall be known what barriers have been established and which function they are intended to fulfil, cf. Section 1 on risk reduction, second paragraph, and what performance requirements have been defined in respect of the technical, operational or organisational elements which are necessary for the individual barrier to be effective. • It shall be known which barriers are not functioning or have been impaired. • The party responsible shall take necessary actions to correct or compensate for missing or impaired barriers. …..”

26. The Management reg. § 21 Follow-up • “The party responsible shall follow up to see that all elements of his own and of other participants’ management system are established and functioning as intended, and that an adequate level of health, environment and safety exists. • This follow-up shall contribute to identifying technical, operational or organisational weaknesses, failures and shortcomings. • Methods, frequency and extent of the follow-up, and the degree of independence in its implementation, shall be adapted to the importance of these element to health, environment and safety.”

27. The Management reg. § 21 Follow-up The responsible parties Authorities License owner SFT Operator PSA Contractor HTil Subcontractor

28. The Management reg. § 5 Internal requirements • “The party responsible shall stipulate internal requirements which specify the regulatory requirements, and which will contribute to meeting the objectives in relation to health, environment and safety, cf. Section 4 on objectives and strategies. If the internal requirements are expressed functionally, criteria of fulfilment shall be established. • The operator shall ensure that there is accordance between his own requirements, as well as between own requirements and the requirements of other participants.”

29. Section 6 Management Regulation

30. Section 7 Management Regulations In view of the requirement of continuous improvements, such monitoringparameters may be an important tool.

31. Section 11 Management Regulations

32. Sections on analyses – Management Regulations

33. Framework regulation §15 Verifications • “The party responsible shall consider and come to a decision with regard to the extent of verifications, the method to be used in and the degree of independence of the verification in order to document that the requirements of the legislation relating to health, environment and safety have been met. When it has been decided that verifications are to be implemented, such verifications shall be carried out according to an overall and unambiguous verification programme and verification basis. • The operator shall establish the verification basis for the total petroleum activities after having made an evaluation of the extent of, the method to be used in and the degree of independence of the verification. The operator shall also carry out an overall evaluation of the results of verifications which have been carried out. • The Petroleum Safety Authority may require the operator to have verifications carried out, or alternatively carry out verifications itself”

34. The Management reg. § 20 Handling of non-conformities • “The party responsible shall record and follow up non-conformities to the requirements relating to health, environment and safety legislation, including non-conformities to internal requirements that are of significance to compliance with the requirements contained in the health, environment and safety legislation. To what extent the non-conformities are of significance to health, environment and safety, individually and in relation to other non-conformities, shall be considered and determined. • Non-conformities shall be corrected, their causes shall be established and corrective actions shall be initiated to prevent recurrence of the deviation. The actions shall be followed up and their effect shall be evaluated. • Until non-conformities have been corrected, necessary compensating actions shall be initiated in order to maintain an adequate level of health, environment and safety. • Necessary preventive actions to avoid other potential non-conformities, shall be initiated. • The party responsible shall keep a summary of the status of non-conformities in his own activities. The operator or the person responsible for the operation of a facility shall keep an overall summary.”

35. Avvik og UnntakNon-Conformity and Exemption • Avvik: Uoverenstemmelse med spesifisert krav • et forhold • Unntak: Myndighetenes aksept av et avvik fra myndighetskrav • en beslutning • "Non-conformity" denotes in this context a discrepancy between chosen solutions and statutory requirements. • "Exemption" denotes the authorities' decision to accept a non-conformity to a requirement of regulations

36. Framework reg. §59 Exemptions • “The Ministry of Labour and Government Administration, the Ministry of the Environment, the Ministry of Health, the supervisory authorities as mentioned in Section 55 or anyone authorised by them may make exemptions from the provisions issued in or in pursuance of these regulations within their respective areas of authority when particular reasons for such exemption exist, with the specifications which follow from Section 13 of these regulations on the duty to establish, follow up and further develop a management system, fifth paragraph. • If the exemption may be of importance to safety and the working environment, a statement from the elected representative of the employees relating to the application shall be enclosed with the application for exemption • Exemption only when authorities HES level is not fulfilled!

37. Section 22 Management Regulations

38. Questions • What is the difference between ”Non-conformity” and ”Exemption”? • Non-conformity: Dicrepancy between chosen solution and statutory requirements • Exemption: Authorities decision to accept a non-conformity

39. Design of facilities

40. CHAPTER I INTRODUCTORY PROVISIONS § 1 Definitions § 2 Systems and other equipment for manned underwater operations from vessels CHAPTER II GENERAL PROVISIONS § 3 Choice of development concept § 4 Design of facilities § 5 Design of simpler facilities without overnight stay possibility § 6 Main safety functions § 7 Safety functions CHAPTER III MULTIDISCIPLINARY PROVISIONS III-I MULTIDISCIPLINARY COMMON REQUIREMENTS § 8 Qualification and use of new technology and new methods § 9 Plants, systems and equipment § 10 Loads, load effects and resistance § 11 Materials § 12 Handling of materials and transport routes, access and evacuation routes § 13 Ventilation and indoor climate § 14 Chemicals and chemical exposure § 15 Flammable and explosive goods § 16 Instrumentation for monitoring and recording § 17 Systems for internal and external communication § 18 Communication equipment III-II DESIGN OF WORK AREAS AND ACCOMMODATION SPACES § 19 Ergonomic design § 20 Man-machine interface and information presentation § 21 Outdoor work areas § 22 Noise and acoustics § 23 Vibrations § 24 Lighting § 25 Radiation § 26 Equipment for transportation of personnel § 27 Safety signs III-III PHYSICAL BARRIERS § 28 Passive fire protection § 29 Fire divisions § 30 Fire divisions in living quarters § 31 Fire and gas detection systems § 32 Emergency shutdown systems § 33 Process safety systems § 34 Gas release systems § 35 Fire water supply § 36 Fixed fire-fighting systems § 37 Emergency power and emergency lighting § 38 Ballasting systems § 39 Open drainage systems REGULATIONS RELATING TO DESIGN AND OUTFITTING OF FACILITIES ETC. IN THE PETROLEUM ACTIVITIES “THE FACILITIES REGULATIONS “ page 1 of 2

41. III-IV EMERGENCY PREPAREDNESS § 40 Equipment for rescue of personnel § 41 Material for action against acute pollution § 42 Standby vessels § 43 Means of evacuation § 44 Survival suits and life jackets etc § 45 Manual fire-fighting and fireman's equipment III-V ELECTRICAL INSTALLATIONS § 46 Electrical installations CHAPTER IV SPECIFIC SUPPLEMENTARY PROVISIONS IV-I DRILLING AND WELL SYSTEMS § 47 Well barriers § 48 Well control equipment § 49 Compensator and disconnection systems § 50 Drilling fluid system § 51 Cementing unit § 52 Casings and anchoring of wells § 53 Equipment for completion and controlled well flow § 54 Christmas tree § 55 Remote operation of pipes and work strings IV-II PRODUCTION PLANTS § 56 Production plants IV-III MAIN LOAD BEARING STRUCTURES AND PIPELINE SYSTEMS § 57 Main load bearing structures § 58 Pipeline systems IV-IV LIVING QUARTERS § 59 Living quarters § 60 Health department § 61 Emergency unit § 62 Supply of food and drinking water IV-V MARITIME INSTALLATIONS § 63 Stability § 64 Anchoring, mooring and positioning § 65 Turret IV-VI DIVING SYSTEMS § 66 Systems and equipment for manned underwater operations IV-VII OTHER SUPPLEMENTARY PROVISIONS § 67 Loading and discharging facilities § 68 Waste § 69 Exhaust ducts § 70 Lifting appliances and lifting gear § 71 Helicopter decks § 72 Marking of facilities § 73 Marking of equipment and cargo § 74 Lifts CHAPTER V IMPLEMENTATION OF EEA LAW § 75 Simple pressure vessels § 76 Personal protective equipment § 77 Aerosols § 78 EMC § 79 Ex-equipment § 80 ATEX § 81 Pressure equipment not comprised by the Facilities Regulations § 82 Machinery and safety components not comprised by the Facilities Regulations CHAPTER VI ENTRY INTO FORCE § 83 Entry into force “THE FACILITIES REGULATIONS “ page 2 of 2

42. Section 3 Facilities Regulations

43. Facility reg. §4 Design of facilities Facilities shall be based on robust and the simplest possible solutions and shall be designed so that • a) withstand loads …. • b) ALARP • c) single component failure • d) maintain main safety functions • e) safe material handling • f) working environment • g) operational limitations • h) health and hygiene • i) lowest possible risk of pollution, • j) satisfactory maintenance. • Fire and explosion strategy. • Area classification • Green water

44. Robust design shall contribute such that the facilities can withstand unknown dangers. ”Safety factor” We are focusing on the known dangers Known dangers Unknown danger

45. Facility reg. § 6 Main safety functions • “The main safety functions shall be defined unambiguously in respect of each individual facility in order to ensure the safety for personnel and to limit pollution. • With regard to permanently manned facilities the following main safety functions shall be maintained in the event of an accident situation: • a) preventing escalation of accident situations so that personnel outside the immediate vicinity of the scene of accident, are not injured, • b) maintaining the main load carrying capacity in load bearing structures until the facility has been evacuated, • c) protecting rooms of significance to combating accidental events, so that they are operative until the facility has been evacuated, cf. Section 29 on fire divisions, • d) protecting the facility’s safe areas so that they remain intact until the facility has been evacuated, • e) maintaining at least one evacuation route from every area where personnel may be staying until evacuation to the facility’s safe areas and rescue of personnel has been completed. ….”

46. Facility reg. §7 Safety functions • Facilities shall be equipped with necessary safety functions which at all times are able to • a) detect abnormal conditions, • b) prevent abnormal conditions from developing into situations of hazard and accident, • c) limit harm in the event of accidents. • Performance requirements shall be defined • The status of safety functions shall be available in the central control room. • Safety functions should be designed so that they can be tested and maintained without impairing the performance of the functions

47. Section 8 Facilities Regulations

48. Section 10 Facilities regulations Section 10 is rather general and functional, in guidelines one will findreferences to other standards.

49. Section 16 Facilities Regulation

50. Section 38 Facilities regulations It is seen that the Facilities Regulations directly refer to the regulationsprovided by the Norwegian Maritime Directorate.