Spread the love

Every business across the globe confronts risks, some of which may be colossal or deadly. Natural disasters account for a large number of losses, and cyberattacks continue to threaten the safety of companies as well. Article by Content Team, HIMA Group.

 

Allianz Global Corporate & Speciality (AGCS) has released its “Allianz Risk Barometer Report” for 2019, the eighth year running. The data presented is taken from more than 2,400 risk management experts from over 80 countries and has garnered 2,882 responses across 22 industrial sectors. The annual survey examines the top 10 risks for companies across the globe, based on individual countries, regions, and specific industries, such as agriculture, manufacturing, mining, shipping, and oil and gas.

What’s the situation in the oil and gas industry? Today, we explore the top five risks to the oil and gas trade and explore what plant operators can do to protect against these risks:

 

1. Business Interruption

According to the report, 53 percent of the respondents saw business disruption as one of the most prominent business risks for the oil and gas industry. This is also the seventh consecutive year business disruption is listed as a top risk in the report.

Regardless if the cause of risk traces back to a fire incident or a cyber attack, the repercussions for a company are often underestimated. On average, monetary losses as a consequence of business disruptions can amount to more than US$2 million. In many cases, it is difficult to even accurately calculate the financial impact or identify the cause of the disruption.

2. Fire and explosions

The second most frequent cause of damage to businesses came as no surprise. Fire and explosion incidents accounted for 44 percent in 2019 in the report. The effects of this risk can be devastating and can include the loss of lives, property damages, environmental pollution, and in some cases, a shutdown in the business altogether.

Systems that control, regulate, and protect burners can prevent such severe consequences, and minimise their loss in an unfortunate fire or explosion event. Emergency shutdown systems also prevent hazards, ensuring safe operations. This is necessary as the process industry has several critical triggers for fires. Depending on the system, extremely high pressures can build up in closed pipes or tanks. Some tank and pipe systems might be unable to withstand beyond a certain level of pressure threshold. This can result in considerable operational damage. In addition, it also poses serious health hazards to employees.

For fire and explosion emergencies, fire and gas systems should be set in place to detect dangerous situations from an early stage. With such a system in place, employees are accorded time to take crucial measures, such as evacuating the plant in the event of a dangerous situation.

3. Natural Catastrophes

Natural disasters place third as a risk in 2019, coming in at 36 percent (a significant drop from 53 percent as compared to 2018). While natural disasters are inevitable, they may trigger considerable social and economic impact, including business disruption.

Back in 2017, a whopping US$135 billion went to insured losses. The devastating consequence of the three hurricanes Harvey, Irma, and Maria served as a wake-up call for plant operators and got them asking, “Is damage caused by extreme weather something we have to get used to?”

4. Cyber Incidents

In the past year, the frequency of cyber incidents have been soaring, and news of breaches and data leaks are seen every other day. In the connected world we live in, everything relies on networking – and that includes the process industry. However, this makes systems vulnerable.

Regardless if it is cyber crime, IT failure, power outage or a data breach, these incidents can lead to severe business disruptions, resulting in a loss of business, and inflict considerable damage to a company’s reputation.

In a bid to counter the rising cyber incidents, countries have been taking preventive measures such as establishing privacy laws, such as the GDPR in Europe and PDPA in Singapore.

Cyber attacks can lead to severe business disruptions, loss of customers, and damage to a company’s reputation. Statistically, every company in this survey has already been affected by cyber threats or expects to be in the future. Cybersecurity has consequently become an essential part of industrial safety.

The international standard IEC 62443 requires separate network levels with defined transitions so that operators are able to protect all key areas: hardware, the operating system, the network, and engineering.

5.Environment risks

In the production and processing of oil and gas, even the smallest technical malfunction can lead to serious consequences. Such malfunctions can impact people, machines, and the environment directly. A single leak in a pipeline is enough to release pollutants – like methane gas.

Systems made for early leak detection can ensure the longevity of a company. Detecting leaks enables operators to not only prevent devastating damage, but also avoid irreparable consequences for their image and reputation.

 

Identify Risks and Reduce the Threat They Pose

The oil and gas industry is one of the most demanding sectors in the world. It is crucial for operators to take risk-reduction measures after identifying the existing risks involved.

SIS safety control and related functional safety life-cycle methods do not only ensure safe production. Business disruption insurance and certification organisations also play a part in ensuring appropriate emergency and preventative measures are taken. Only then is a company insured against unforeseen incidents.

However, this often presents operators with a costly and time-consuming challenge. It is mandatory to have a specially trained personnel to operate the safety solution and ensure that the technology always work reliably. But this requirement means that some employees may need to be deployed for safety operations, and distract them from their core duties, which is primarily efficient production.

One possible solution would be to hand over support for the entire system to experts. These specialists service safety systems over their complete life-cycle, perform regular maintenance, and replace consumable parts. Holistic solutions enable companies to reduce life-cycle costs, prevent disruptions, and reduce unplanned downtime – minimising the majority of risks that are of the highest concern.

 

Check out other articles:

10 Major Challenges & The Benefits Of Automation For Small Manufacturing Business Owners

Cybersecurity: Smart At Home, Smart At Work

Electrochemical vs Semiconductor Gas Detection – A Critical Choice

 

CLICK HERE FOR LATEST NEWS.

READ CURRENT AND PAST ISSUES OF IAA.

KEEP YOURSELF UPDATED, SUBSCRIBE TO IAA NOW!

AND DON’T FORGET FOLLOW US ON FACEBOOK, LINKEDIN AND TWITTER !

 

 

Debunking the Top 4 Myths About Warehouse Maintenance & Upgrading
Charging Solution Makes Taipei City Electric Vehicle-Friendly