Auditor slams oil safety regulator

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Environmental activists were alarmed this week, after Norway’s state auditor general’s office all but blasted Norway’s Petroleum Safety Authority (Petroleumstilsynet, PTIL) for not doing a better job. The highly critical report of the regulatory agency, which was even worse than environmental activists had expected, comes just as Norway’s Oil Ministry has granted a record number of new licenses to allow more offshore exploration.

The Goliat platform, photographed on an unusually calm day in the Barents Sea, was singled out in the state auditor general’s highly critical report as having many serious problems that the state petroleum safety authority failed to adequately address.  PHOTO: Eni Norge/News On Request AS

“This is something we’ve been warning about for years,” Frederic Hauge, leader of the environmental organization Bellona, told state broadcaster NRK after the state auditor general’s report was released on Wednesday. Bellona had asked that the state petroleum authority be audited, and was glad that’s now been done, but Hauge isn’t happy at all over the result.

“The report is very bad for PTIL’s credibility,” Hauge said, adding that it means “people have been in danger” while on working board some of Norway’s offshore oil and gas installations.

State Auditor Per-Kristian Foss stated that it was “extremely serious” that the safety authority “has little impact on the oil companies’ safety and security measures, in a sector with a high risk of accidents.” He noted how accidents, not least in sensitive Arctic areas, can have “major consequences for people, the environment and material values.”

The report claims that PTIL hasn’t, to a sufficient degree, uncovered serious safety flaws, nor has it used its toughest means of reacting to safety deficiencies often enough. The state auditor specifically pointed to the “great challenges” that Italian oil company Eni had with its huge Goliat platform even before it was put into place in the Barents Sea, as the first major platform controversially allowed to operate in Norway’s Arctic waters.

Foss went so far as to contend in the auditor general’s press release that Goliat never should have been allowed to commence operations before it had been fully cleared as being safe. “The petroleum authority didn’t check whether things they’d been ordered to correct had been followed up,” Foss told newspaper Dagens Næringsliv (DN) on Wednesday. “They gave permission (to Eni, operator of the rig that was part-owned by the former Norwegian state oil company Statoil at the time) to put the platform into operation before safety measures were in place.” He noted that the platform subsequently was shut down on several occasions because of severe problems and safety deficiencies.

State Auditor General Per-Kristian Foss believes Norway’s Petroleum Safety Authority (Petroleumtilsynet, PTIL) has been so deficient in its regulation of oil and gas platforms that it’s losing its authority over the oil companies running them. PHOTO: NRK screen grab

“The worst thing,” Foss told DN,  “is that when really serious deficiencies are uncovered, the model for having confidence (that corrections will be made) doesn’t function. That can lead to accidents and cost lives. There’s a lot at risk here.” The Petroleum Safety Authority has relied far too heavily on the companies to correct deficiencies.

The Norwegian oil industry has a model in which the companies themselves are responsible to check that operations meet safety standards, and report violations. Then the authorites at PTIL are supposed to follow up and make sure the companies follow regulations. “We have examined some really serious cases,” Foss said. “The petroleum authority should have been much more persistent and not relied on the companies.”

Anne Myhrvold, director general of the harshly criticized authority, claims Goliat has been “the most demanding project” to regulate in recent years and is “not representative” of the rest of the industry. She insists the authority has taken “unusual measures” against Goliat and its operator Eni, which recently changed its name to Vår Energi following a merger of Eni Norge and Point Resources. She claims the authority was given “incorrect information from the company about Goliat,” and called that “completely unacceptable.”

Myhrvold claims she’s taking the state auditor general’s criticism seriously, and welcomes the call for “stricter supervision,” but she sees no reason to resign as the safety authority’s director. “This is about making regulatory improvements, and that’s my job,” she told DN, even adding that the auditor general’s report was “good” and that PTIL will work with it. In PTIL’s own press release on the report, (external link, to the authority’s own website) the regulatory agency claimed that the State Auditor General’s report presented “proposals for improving and strengthening” its role, adding that the report was “generally supportive of today’s petroleum safety regime.”

Foss, a former finance minister for the ruling Conservative Party, didn’t seem to entirely agree with her assessment, worrying that PTIL’s poor follow-up of oil companies’ serious violations means that it will lose its authority in the eyes of the companies. “It’s serious that PTIL seldom uses its toughest measures, like issuing fines or shutting down production,” he said. “That weakens its authority over the companies.” PTIL has, however, eventually ordered shutdowns of Goliat.

Frederic Hauge, leader of the environmental organization Bellona, has long opposed oil and gas exploration and production in Norway’s far northern waters. He’s glad the state auditor general has examined the country’s Petroleum Safety Authority, but upset that its regulation of the oil companies has been so poor. PHOTO: Bellona

Labour Minister Anniken Hauglie, also from the Conservative Party, said she’s taking the auditor general’s report seriously as well, and already has asked PTIL to be tougher as a safety regulator. Hauglie said PTIL needs to be “strong and clear and use all its methods when necessary.”

Oil Minister Kjell-Børge Freiberg of the Progress Party believes Norway’s offshore installations are generally safe. “I have registered the report,” Freiberg told DN. “My impression is that the companies are concerned about health and safety and that the authorities are concerned about it too.” State oil company Equinor (formerly Statoil), however, is among other companies criticized in the state auditor’s report for having failed to follow up on the authorities’ instructions.

The state auditor general’s report was released just as oil industry officials were gathering for a traditional seminar in Sandefjord, at which Freiberg handed out a record 83 licenses for even more oil and gas exploration in Norwegian waters. Most of them are in the Arctic, provoking climate and environmental advocates. They claim Norwegian officials on both the Conservative- and Labour sides of politics are far more concerned about job creation and how oil and gas fuel the Norwegian economy than on safety and environmental concerns.

“We have a petroleum safety authority that’s not functioning, and this is a crushing evaluation of it,” Hauge of Bellona told DN. He promised to take a copy of the report to the European Commission, so it can take a closer look at the highly critical evaluation  of Norwegian offshore safety regulation.

“There should be a full stop in handing out any new oil and gas exploration licenses,” Hauge said, “until there’s full control over the current situation.”

newsinenglish.no/Nina Berglund