Rules Written in Blood: A Case Study of Risk Management in the Oil and Gas Industry

Purpose: The study aims to investigate how and when the oil and gas industry adopts industry best practices and enhanced standards addressing process safety and operational integrity after catastrophic events. Design/Methodology/Approach: We reviewed the literature available for disastrous incidents that shaped the oil and gas industry with a special reference to three distinct catastrophic events: Piper Alpha (1988), Deepwater Horizon (2010) and Ku-Maloob-Zapp (KUMAZA) (2021). Three primary case studies were evaluated to understand the cycle of creation and adoption of industrial standards meant to address risk management related to process safety and operational integrity in the industry. Findings: We have proposed an adoption cycle for how the industry reacts to catastrophic events, with respect to the adoption of best practices, and creation of enhanced standards, to address the root causes of these events. System 1 thinking dominated initial reactions to each catastrophic event, through the integration of existing standards. System 2 thinking drives the formulation of enhanced standards which more thoroughly deal with additional factors which contributed to compelling events. Research Limitation: Future research may explore the nuances related to the timeline for adoption of industry best practices once a standard is published by API, ISO, or another SME. These nuances could include different organizational profiles for companies adopting a standard. Managerial Implications: This study offered insights intorisk manage- ment as applied to process safety in oil and gas operations. There exists a lag between the creation of industry best practices through the publication of standards, and the adoption of these practices. Originality/Value: Future researchers may research and generalize findings beyond the current parameters of this study.

Keywords

Operational Integrity, Process Safety, Quality Systems, Risk Management, Risk Mitigation, Safety Standards.

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