News Article

The Consolidation of ASEA

Thu, 07/19/2018 - 16:33

April 1, 2015. Mexico wakes up to a fire at PEMEX’s Abkatún Alfa offshore oil rig, causing four deaths and several injured. The accident required eight fire-fighting vessels to be quenched. One month earlier, in March 2015, the National Agency for Safety, Energy and Environment (ASEA) was officially launched and the incident set the tone for the scope and depth of the challenges the agency would face, said Jimena Marván, Chief of Planning, Strategic Partnerships and Processes at ASEA, during the second day of Mexico Oil & Gas Summit 2018.

“In our capacity as ASEA, we are fundamentally focused on operational correction through regulation and inspection to raise operational practices to better levels, underlining the value of corrections over sanctions, to accompany the industry in their operative processes, detect gaps and bridge them,” said Marván at the Sheraton María Isabel in Mexico City on Thursday.

The agency is present across each link of the industry’s value chain, from exploration to service stations. “The oil and gas industry is a risk industry. The design of ASEA’s model is rooted in risk prevention, incorporating both preventive and corrective scopes. We are developing the adequate financial instruments to mitigate these risks as articulated, reflected and defined in ASEA’s regulation,” Marván told the audience. “Our regulation’s focus is rather objective-centered than prescriptive.” Taking a closer look, ASEA’s efforts in the upstream sector is rooted in an intricate system that includes operational and industrial security, environmental regulation and insurance guidelines developed in coordination with the international insurance industry. On the midstream side, ASEA has developed a regulatory framework covering petroleum products storage, pipeline transportation, environmental regulation, equally fed by guidelines provided by the international insurance industry.

ASEA’s process cycle is outlined by a virtuous circle where the implementation of a strategy and institutional design at the policy level produces the required regulation, which in turned is evaluated based on the control of its outcomes. In parallel, the agency administers the industry’s day-to-day risks and third-party services that serve both as ASEA’s boots-on-the ground team and data generator. The outlined cycle allows for an improved institutional evaluation. “Our exploration and production guidelines for the industry follow best practices in the US, Canada, Norway, the UK and Brazil,” said Marván. To foster increased seamlessness in ASEA’s process cycle, the agency is going digital. By adopting cloud technology, ASEA is aiming at administrative simplification and improved decision-making. It also developed a simplified, user-friendly online platform for the registration of online multi-administrative procedures.

To act both as regulator and enabler, regulatory pieces published in the Official Journal of the Federation for the upstream, midstream and retail sectors translate the regulatory language in operational and environmental security to the industry’s operational logic, fostering improved compliance. In 2017, the agency marked an important milestone with the design and launch of the Environmental Protection, Industrial and Operative Security Administration System (SASISOPA) for natural gas supply activities for the distribution and public supply of LPG and petroleum products. Despite its recent creation, ASEA is already producing results. “Forty months after its official launch, it published 24 industry-related regulations, evaluated more than 25,000 administrative procedures, concluded more than 2,500 inspections, experienced 10 percent fewer litigations over authorization procedures and habilitated 190 third-parties,” said Marván. Chief among the aforementioned statistic, the most critical is the following: Between 2015 and 2017, the accident frequency index per 1 million man-hours dropped from 0.38 to 0.13 in the E&P sector. During that same period, the accident frequency index in refineries per 1 million-man hours decreased from 0.61 to 0.24 accidents, Marván said.

To fulfill ASEA’s mission of guaranteeing the security of individuals and the integrity of the environment through legal, procedural and cost certainty in the hydrocarbons sector, the agency will continue working toward the reinforcement of the existing regulatory framework. Marván said ASEA has all hands on deck to transition from risk-management activities to an integral Risk Management System cemented on the SASISOPA. Among the priorities of ASEA for 2018, methane emissions prevention and mitigation will be at the center of the agency’s work, said Marván, adding that it will develop a six-step cycle: identification, quantification, goals and objectives, prevention and control measures and audit and reporting activities to counter the gas’ harmful effects.