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Russian Oil Sector Underinvesting in Safety

Rosneft-Achinsk-fire-Russia

And the battle continues – Profit vs. Safety.  During the 1st half of 2014, Russia’s oil sector had ten major accidents, including seven refinery accidents that killed nine people.  Industry experts are blaming industry consolidation, cost cuts, and negligence.

“I see three main reasons – less technical-savvy management, staff and incompetent contractors,” said Andrei Kostin, head of the research company Rupec, who says personnel were responsible for 90 percent of the accidents. (Reuters)

Official data states that Russian refineries increased refining by 7.4% in the first five months of 2014.  The tendency for oil companies to run at full capacity while underinvesting in maintenance is partly due to ruble depreciation, which makes foreign equipment more expensive. Rapid personnel turnover within the industry also compounds the problem by keeping staff expertise consistently low at all levels.

“The staff often don’t know the units’ detailed specifications and how technological processes work in emergency modes,” the technologist who asked not to be named told Reuters. “And on top of that they ignore instructions and regulations. For example, they don’t care if only 10 of 30 gauges are in order as long as the unit works.” (Reuters)

“The situation is going to worsen because the management underestimates the staffing problem and the amount of money they need to spend on fixed assets,” Kostin said. (Reuters)

Reuters

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