te year in review

International Association of Oil & Gas Producers

Highlights of 2007
Advances in advocacy
O
GP represents the upstream industry
before a wide range of interna-
tional bodies. In 2007 the Association
succeeded in gaining acceptance for
the industrys point of view in several of
these forums.
One of the most notable breakthroughs
came at the end of the year, when the
European Council and the European
Parliament agreed to a compromise on
their proposed Marine Strategy Direc-
tive. Initially, the European Parliament
had discussed establishing areas that
would be closed to any extractive uses.
This would have put a severe limitation
on access to some of the regions most
important oil and gas reserves. The
Directive as published fully answers OGP
concerns.
Another amendment would have
completely forbidden any releases into
the water column, including those that
posed no potential hazard. Now, in line
with OGP recommendations, no such
draconian measures are included. In-
stead, Member States will now take into
account the release of substances and
contamination by hazardous substances
when drawing up initial assessments of
their marine environments.
A third concern involved noise. Again,
though noise and acoustics gure in the
compromise Directive, they are included
as issues that need to be considered in
the framework of the Marine Strategy,
rather than as matters that are speci-
cally addressed. Expressing his delight
at the results of the compromise between
the Council and the Parliament, Euro-
pean Environment Commissioner Stavros
Dimas said It is absolutely vital for the
EU to protect its marine waters and to
clean up the seas and oceans.
OGP members were also pleased at
the outcome. The Marine Strategy issue
has been with us for a long while... as a
Raphael Vermeir,
March 2008
W
hen you look back over a full year of OGP activities and achievements, you
realise what an amazing organisation we belong to. With help from just a
small secretariat, OGP committees, subcommittees and task forces continue to have
an enormous impact across a wide range of upstream activities. Our voice is heard
by legislators, regulators and operational colleagues around the world.
Having been in post as Chair only since August 2007, I cant take much credit for
any of this. But I can give credit where its due: to the men and women from E&P
companies and organisations who provide the sweat equity on which we rely, to
OGPs employees in London and Brussels and to my predecessor, Rhonda Zygocki,
and colleagues on the Management Committee.
As you read this summary of what OGP accomplished in 2007, Id like you to do so
in the context of where were heading.
At a time in our industry when human and nancial resources are at a premium, at
OGP we have to be clinical about prioritising our efforts. That probably means doing
less, but concentrating more of our efforts on issues that really matter to our member
companies and associations. Those issues will include facility security, asset integrity,
the marine environment and security of supply.
Of course, we wont be alone in dealing with these matters. And we shouldnt be,
since other international, regional and national organisations also have a great deal
to contribute. However, given limited resources, we have to make certain that we
avoid duplication of effort. One way to do that is to maximise the effectiveness of
communications externally and among our own committees. That way, we can ensure
that all risks relevant to our industry are covered.
As shown in this report, in 2007 we made considerable progress in managing many
of those risks. We can do more by taking responsibility ourselves to make certain that
OGP guidelines and best practices become more widely known and implemented
in our own companies and organisations.
By this time next year, I hope thats something we can demonstrate throughout our
industry.
An introduction from the Chair:
potentially huge threat to our industry,
Raphael Vermeir commented. Now,
however, much of that threat has been
lifted.
The industry scored a similar success
with the OSPAR Commission for the
Protection of the Marine Environment
of the North East Atlantic on the issue
of carbon capture and storage (CCS).
Consistent with OGPs long-term CCS
position, OSPAR voted at its annual meet-
ing in June to allow carbon storage in
geological formations under the seabed.
The Convention also issued guidelines
for risk assessment and management of
that activity. OSPAR contracting parties
will now be assessing how CCS can be
integrated into their policies to address
atmospheric carbon dioxide concentra-
tions and ocean acidication.
More widely on the advocacy front,
OGP cemented relations with the Interna-
tional Regulators Forum when Executive
Director Charles Bowen addressed the
groups second Offshore Safety Confer-
ence. He conrmed that structurally
and mechanically sound facilities that
perform the processes and produce the
products they were designed to deliver
are major goals of the upstream industry.
Moreover, we are achieving these goals
through rigorous application of appro-
priate management systems, supported
by the work of OGPs Asset Integrity
Task Force.
Some offshore assets have been operating for decades
T
he second phase of the OGP-man-
aged Joint Industry Programme (JIP)
on E&P Sound and Marine Life marked
the end of its rst year in May 2007, with
14 companies as funding sponsors and
one industry association. In addition to
core funding from participants, the JIP
has also raised further funds through
partnerships with other public agencies
in Norway and the USA.
By the end of 2007, the JIP had awarded
almost 50 contracts worth a total of
just under $16 million. One of the most
important of these projects, Seismic
sound source 3D characterization,
was conducted by US Naval Research
Laboratory and the Universities of New
Orleans, Southern Mississippi and
Louisiana (Lafayette). Fieldwork nished
in the autumn.
Plans are underway for a comprehensive
programme review meeting on all of
the JIPs research in October 2008 in
Houston.
A whale of a project and more
Getting more global
O
GP is the worlds only organisation
to represent the upstream industry
on a global basis. In 2007 ve new
memberships considerably broadened
the Associations international scope.
Never having had a member from
Iran, OGP was particularly pleased to
welcome two new members from that
country in the rst two months of 2007:
the newly formed Persian LNG, now
better known as PLNG and Petropars,
which is now assuming global status as
an upstream operator. To ensure the wid-
est possible benet of its membership,
by mid-year, Petropars had started an
on-going programme to translate OGP
reports into Farsi.
OGPs rst member company from India
joined in the summer, having stated its
intention to do so at the Associations
April AGM in Delhi. ONGC holds the
subcontinents largest share of hydrocar-
bon acreage, providing 84% of Indias
oil and gas production.
In the autumn INPEX Holdings Inc. be-
came OGPs second member company
from Japan. INPEX is active in Indonesia,
Western Australia, the Caspian and the
Middle East.
From Canada OGP welcomed Calgary-
based Talisman, which has interests
extending to the rest of the Americas, the
North Sea and southeast Asia.
Playing it safe
A
s usual, OGP provided the industry
benchmark for global safety per-
formance with its report, Safety perform-
ance indicators, the most comprehensive
document of its kind, covering 2.94
billion hours worked in 84 countries.
Based on 2006 gures, Safety perform-
ance indicators showed a 4% drop in
the rate for total recordable incidents.
Overall, there were 2.92 incidents
(including fatalities, and cases resulting
in lost and restricted workdays and/
or medical treatment) per million hours
worked. This was the lowest incident rate
on record, achieved in a year that saw
a 23% increase in reported upstream
activity. On the downside, the global
upstream industrys fatal accident rate for
the year was 3.9 deaths per 100 million
hours worked. There were 115 fatalities
reported by the 41 companies involved
in the report, representing an increase
of 11% on the previous years gure
which had been the lowest on record.
For the rst time in several years, there
was a reduction in the number of deaths
resulting from vehicle incidents, which
had been the largest single cause of
fatalities associated with upstream
production. Though no direct connection
can be made at this early stage, it is
encouraging to note that the drop follows
the OGP Safety Committees particular
focus on transport safety in 2005 and
early 2006.
Decision-makers agree: theres
more where that came from
P
rovided upstream companies are
given access to the acreage they
need for exploration and production
purposes and fair and stable scal
regimes that encourage such activity
there should be enough oil and gas in
the world to meet growing world energy
demand for decades to come. Thats
OGPs take on security of supply and,
according to research commissioned in
2007, the message has been received
and accepted by decision-makers and
opinion leaders in the European Union.
The ndings were part of a survey involv-
ing 464 key gures in Brussels. More
than half of those questioned believed
that oil and gas will last longer than
50 years an increase of 10% since a
similar poll asked the question two years
ago. There was particular optimism on
this point from the European Commis-
sion, the Parliament and the Council.
Regarding overall impressions of
the upstream industry, the view was
generally positive, with 15% deeming the
industry excellent, 46% good and 33%
acceptable. Only 6% had a poor view
of upstream operators down from 13%
in 2005.
Where were from; where were working: numbers of head ofces shown in blue;
numbers of members active in a region are shown in black.
3
23
15
24
1
31
9
35
8
29
1
23
26
31
Total Recordable Incident Rate over the past 10 years
(per million hours worked)
0
2
4
6
8
10
12
Overall
Contractor
Company
2006 2005 2004 2003 2002 2001 2000 1999 1998 1997
Only 6% of those polled had
a negative impression of our industry
Acceptable
33%
Excellent
15%
Poor
6%
Good
46%
London ofce: 209-215 Blackfriars Road, London SE1 8NL, UK Tel: +44 (0)20 7633 0272 Fax: +44 (0)20 7633 2350
Brussels ofce: 165 Bd du Souverain, B-1160 Brussels, Belgium Tel: +32 (0)2 566 9150 Fax: +32 (0)2 566 9159
Web: www.ogp.org.uk E-mail: reception@ogp.org.uk
A company limited by guarantee Registered in England, No. 1832064 VAT No. 241 240 903
www.ogp.org.uk
Well met again
E
very year OGP holds two general
meetings that aim to bring the global
upstream industry together in venues
located in areas where industry interests
are concentrated or in locations that are
also hosting major industry events.
For 2007s Annual General Meeting
(AGM) in April the Association gathered
for the rst time in India which, with
one of the worlds fastest growing
economies, is rapidly becoming a prime
market for oil and gas as well as a
signicant producer in itself. The meeting
in the capital city of Delhi attracted
members from the Americas, Europe,
the Middle East, elsewhere in Asia and
of course from the sub-continent. One
of the themes of the event was putting
recommended practices to work, which
involved an exploration of the ways
to accelerate implementation of the
guidelines OGP members work so hard
to produce. Other highlights of the Delhi
gathering were a Standards workshop
that featured participation from the
Bureau of Indian Standards,a safety
workshop focussing on global solutions
with a regional approach, and a gala
evening sponsored by Schlumberger.
Novembers General Meeting took the
members to Amsterdam, where Shell
sponsored the event. There, the agenda
included comments on the 2008 busi-
ness plan, approval of the Associations
Petrobras, Shell, Total and Baker Hughes.
Standing down were Qatar Petroleum,
Statoil and Schlumberger.
The new roster of ofcers comprised
Rhonda Zygocki of Chevron as Chair,
Raphael Vermeir of ConocoPhillips
1
st
Vice Chair and Robert Olsen of
ExxonMobil 2
nd
Vice Chair. Following
the Chairs resignation in the summer
due to the pressures of a new company
assignment, both Vice Chairs moved up
one place and John Hollowell of Shell
became the Management Committees
2
nd
Vice Chair.
There were also signicant changes in
OGPs extensive network of commit-
tees, subcommittees and task forces.
In chronological order, Gerard van
der Graaf retired as Chair of the Land
Transporation Task Force, Richard Snell
announced his retirement as Chair of
the Offshore Structures Committee, and
Walter Schaefer stood down as Chair of
the EU Committees Gas Work Group.
The Secretariat saw the departure of
Technical Manager Don Smith for Eni
and his replacement by Carl Woolf, who
joined OGP from the UKs Royal Society
of Chemistry, where he was International
Development Manager. Joining OGP in
the newly-created position of Committee
Support Co-ordinator was Natalie
Scarimbolo. Katie Wong became the
voice of OGP when she joined mid-year
as London Administrative Assistant and
Receptionist.
budget and a review of the activities
and achievements of OGP standing
committees.
All change
I
ts in the nature of dynamic organisa-
tions to experience changes in roles
and responsibilities. OGP is no exception
and in 2007 new faces appeared at
every level of the organisation.
At the top, members chose a new Man-
agement Committee in a postal ballot
that closed on 1
st
March. Eight operating
companies were elected to lead the
Association: BP, Chevron, ConocoPhil-
lips, ExxonMobil, Hydro (since merged
with Statoil to become StatoilHydro),
Position paper on standards
Surveying & positioning guidance note 1
Safety performance indicators 2006
Fatigue management in the workplace
Environmental management in the E&P
industry 2006 data
Safety performance of helicopter opera-
tions in the oil & gas industry 2005 &
2006
Reports
OGP produced a total of 11 reports in
2007. Most of these, as well as many of
the 400 others published since 1974, are
available from the publications section of
www.ogp.org.uk
Health & safety incident reporting users
guide
Standards Bulletin 8
Travel guide
Aircraft management guidelines
Events
In 2007 OGP staged or actively
participated in a wide range of events,
including:
Standards in Eastern Europe, India & the
Far East, and Libya & North Africa
Managing upstream HSE issues
Lifetime Extension of xed steel offshore
platforms
EU Parliament promenade debate
on indigenous production, security of
supply & gas aring
Rakesh Jaggi of Schlumbergers
Delhi ofce addressing the OGP AGM