Certainty in an Uncertain Time

Marred by a series of high-profile accidents in recent years, and following the creation of ASEA, Mexico’s Agency for Safety, Energy and Environment, more and more focus is being given to how Mexico can optimize industrial safety and environmental protection performance across the oil and gas industry. With the number of operators rising from one to 48 and new operators introducing international standards, ASEA has acted to clear the field of uncertainty.

The agency had released all regulation for upstream operations including the deepwaters of the Gulf of Mexico by the end of 2016, which Carlos de Regules, Executive Director of ASEA, says contributed to the active participation in Round 1.4. His comments highlight the commercial aspect of robust safety and environment regulations because they play a part in attracting the world’s largest IOC’s to the Mexican market through increased certainty about what they need to comply with in terms of safety and the environment. “In the past two years, we have published close to 30 different technical regulations that are riskbased and nonprescriptive,” says De Regules.

Robust regulation or not, PEMEX’s past safety record still casts a shadow over ASEA’s evolution. PEMEX’s Abkatún A platform has featured in the news for two deadly accidents in the past two years. The first resulted in the deaths of five workers, after a fire broke out in April 2015. Less than one year later, in February 2016, another fire struck the same platform, killing three workers and injuring six more. In April 2016, a large explosion rocked PEMEX’s Pajaritos petrochemical complex in Coatzacoalcos, killing 32 people and injuring dozens more. The incident was blamed on a leak at the plant.

“Lessons need to be learned from disasters like Pajaritos. A special focus on safety is key for PEMEX to attract private investors who will refuse to participate if maintenance is not at sufficient levels,” points out Daniel Gutiérrez, Director of Pepperl+Fuchs Mexico. PEMEX now faces the paradox of needing to raise its safety standards to attract foreign partners, while grappling with a lack of funding for maintenance work and compliance investment.

Prevention and a proactive approach is one solution, according to Horacio Fajer, General Manager of Kidde de Mexico. “When a near-miss is considered equal to an accident, the analysis allows prevention of future accidents,” he says.

PEMEX SAFETY RECORD

Despite the accidents in recent years, PEMEX’s safety record has improved dramatically over the past two decades, with the number of disabling injuries occurring during 1 million man hours, falling around 90 percent from 1996 to 2015.

Following a downward trend for 20 years, PEMEX’s safety index rating stood at 0.29 per million man hours in 2015, which was significantly below the average global rating of 0.47. PEMEX’s 2016 performance has not been released yet, while global performance dropped to 0.39 disabling incidents per million man hours.

Key developments include the introduction of a safety, health in the workplace and environmental protection program in 2005, since which the index has never topped 0.61, and prior to which the average index was always above 1 since 1996. In 2015, PEMEX introduced 12 zerotolerance directives, the results of which remain to be seen.

In its 2016 year final report, PEMEX attributes its better safety record for the year to its “Binomio” program, which consists of carrying out auditing and technical consultancy activities in critical work centers in PEMEX’s Exploration and Production and Industrial Transformation segments. It involves detecting risks and establishing actions to immediately solve them.

Maintenance is another area of concern with the NOC. PEMEX has seen its budget slashed in recent years as a result of budget cuts and low oil prices. As a result it is investing less in maintenance work. Gerardo Tamayo, Director General of engineering solutions distributor Sumimsa, warns against deprioritizing safety in light of squeezed finances. “It is important to highlight that safety must not be compromised by budget cuts or any other factor as it will put human lives at risk,” he says. Hugo Sánchez, Oil and Gas Sales Manager of Dorot Mexico, agrees. “PEMEX needs to begin seeing safety as an investment because until now they have seen it as an additional cost.”

GAS FLARING

Investment is also necessary to ensure environmental goals stay within reach but here, too, the country has some work to do. A prime example in the oil and gas industry is gas flaring. Mexico flares millions of cubic meters of natural gas, simultaneously contributing significantly to the country’s greenhouse emissions and wasting a valuable natural resource.

Gas flaring results from the need to resolve dangerous pressure peaks as well as relieving pressure safely during planned downtimes, such as maintenance work, startups or shutdowns of oil and gas operations, in the absence of the necessary infrastructure to process or evacuate the gas.

According to The World Bank, thousands of gas flares at oil production sites around the globe burn around 140 billion cubic meters of natural gas annually, causing more than 300 million tons of CO2 to be emitted into the atmosphere. In January 2017, the same organization called upon nations to support and follow the “Zero Routine Flaring by 2030” initiative, which aims to eliminate the practice in the next 13 years.

Mexico is far from reaching such a target and has not been heading in the right direction after it made significant improvements during 2010-2012. Compared to 2012 and 2013 when flared gas was approximately 2 percent and 1.9 percent of the country’s annual production, a dramatic rise since the introduction of the Energy Reform is clear. Gas flaring increased more than fourfold from 2013 to 2016, when it reached a daily average of 504.5MMcf/d, which was approximately 8.7 percent of the country’s natural gas production for that year.

ENVIRONMENTAL PROTECTION

Gas flaring leads to the emission of sulphur into the atmosphere, so it is no surprise that PEMEX reported higher sulphur emissions for 2016, which were 22.8 percent higher than the same period in 2015. In its yearly report PEMEX cited three reasons: an increase in shipments of sour gas to burners in Kumaza, Abkatún Pol-Chuc and Litoral de Tabasco, the burning of acid gas for the maintenance of sulphur plants in CPG Poza Rica, Cd. Pemex and Nuevo Pemex, and finally the increase in the volume of gas sent to burners in the Minatitlan and Salina Cruz refineries, due to maintenance.