Health, safety, environment and community (HSEC) issues affect business performance across project development. Delaying the incorporation of HSEC dialogue in the planning stages of a capital project increases the likelihood such risks will be introduced, overlooked or mismanaged. These risks, often discussed but poorly understood, can impact overall schedule and shift the project value curve.
Senior executives are increasingly vocal about the impact of environmental and social issues on their business. CEOs presenting at the last three CERAWeek conferences on insights into the energy future (and other industry events) have highlighted that maintaining a license to grow is among their top three concerns. Numerous industry studies suggest that as many as 70 per cent of major capital projects are being delayed, costing investors billions of dollars through improper allocation of capital. Recent work by Merrow1, which derives from a performance review of 130 mega oil and gas projects, indicates that only 1 in 5 projects can be deemed a success.
In advancing projects through internal stage gates, some developers in Angola are identifying, managing and mitigating environmental and social impacts as early as possible in the lifecycle of a target asset. These developers are beginning to break down siloes in technical functions (i.e., engineering, drilling, commercial, regulatory, social responsibility, legal and supply chain) as a means to embed HSEC considerations into operational routines and corporate processes.
This manuscript illustrates the parallel processing inherent in successfully embedding HSEC in risk management. Case studies features prioritization of potential HSEC liabilities to frame decisions that minimize development constraints. These prioritization and aligment strategies support decision making and management across the capital value chain. The case studies focus on two themes:
An integration theme: value is created when core competencies (modelling, emergency response, stakeholder engagement and regulatory planning) align and content developed for one stream informs and calibrates risk management for the overall program (Statoil Angola);
A bridging theme: an EPC sets the tone for sustainability by accounting for HSEC challenges in developing an environmental management framework for the operational phase of an energy project (Odebrecht Infrastructure – AH Cambambe, Angola).