The Drive to Cost Reduction Increases the Risk of another Piper Alpha.

The Drive to Cost Reduction Increases the Risk of another Piper Alpha.

April 28 2016

Rigs are currently available for rates significantly discounted from last year. The entire industry is under stress and the battle cry for cost cutting and streamlining are flowing in. In these times it is often too easy to focus on the ‘bottom line’ when making critical decisions like the level of Rig Assurance Inspection to take on when on-boarding a unit for your future operations.

The short term benefit of cost reduction dramatically increases risk. This short term cost savings should not be seen as an advantage. By reducing an inspection scope or straining the inspection supplier one directly introduces risk. The threats of adverse events significantly increase and offset any procurement financial savings.

Some in the industry are acknowledging this truth and urging due diligence when considering what scope to consider during rig intake, and cautioning against taking the lowest bid or an all-inclusive sugar coated solution.

Jake Molloy, representative of the RMT Union Offshore Energy Branch speaking about the current state of the Oil and Gas industry in the North Sea at the STUC conference 2016, warned that the current climate was exactly the same that led to the Piper Alpha disaster where 167 lives were lost in 1988. He was quoted as saying: A “demoralised workforce coupled with a backlog of safety critical maintenance work has grown significantly since the summer.” “Everything that we are seeing in the offshore sector today was played out in 1988 – everything!” “Casualisation, long hours and a demoralised workforce living under constant threat of attacks to their terms and conditions and the ever-present threat of redundancy.” “It wasn’t the way to run an industry in 1986 and it took the deaths of 167 men to prove that.” “We cannot and must not allow this industry to make the same mistakes again!”

From our experience, as specialist inspectors of software automation control systems, it is unwise to consider offers that cover only a portion of the rig intake review or those that promise a complete solution from a single vendor to cover all the needs of a rig from Class Compliance, Construction to Functional Verification. This kind of single source solution has been termed by some as “sugar coated,” “unrealistic” and “irresponsible.” To believe that one house can be the best in all solutions required to certify, inspect, verify and operate a rig is naïve at best.

This is why Kingston Systems has not deviated from our core strategic offering of best in class control system software and automation inspection services. We do not pretend to be a generalist or jack of all trades. We partner with other key specialist firms for solutions that are tailor made to fit your unique rig and operating characteristics. Our partners include:
– Dietswell, Engineering and subsea inspection
– Xwells, rig customization and integration
– Alpine Security, OT/IT Cybersecurity

No new One-Stop-Shop Look-Up Guides or Step by Step Band-Aids accompany this press release. Kingston Systems will work with you and our partners to design a rig intake solution that fits your organization and your needs. Kingston Systems will not compromise quality or your safety for short term marginal gains.