There’s no doubt, all major businesses are now in sharp focus on safety and environment, and we are being judged on our actions, our transparency, and our willingness to work with governments and communities.


Thank you for the opportunity to speak today.

Yesterday we heard from Martin Ferguson and we had the opportunity to reflect on the Montara and Macondo incidents, the Commissions of Inquiry that followed, and the way in which governments and industry have responded – both regionally and globally.

There’s no doubt, all major businesses are now in sharp focus on safety and environment, and we are being judged on our actions, our transparency, and our willingness to work with governments and communities.

Taking time to reflect, share solutions, and make plans to help each other, is not just the right thing to do, it’s the only thing to do if we are to rebuild trust and retain our licence to operate as an industry.

I’d like to share with you our approach to “Culture, Leadership and Prevention”:

  • how that approach has played out in various parts of the world, and
  • how we continue to learn, instil unease, and shift our safety culture

Focus on prevention

At Shell, our focus before Montara and Macondo was prevention. Today, nothing has changed. Our primary focus is still on prevention. We want everyone who works for us - both employees and contractors – to firmly believe it is possible to work without incident, without harm to people, and without damage to the environment. And if you get this focus right, then there is little likelihood of Montara or Macondo type events happening.

However, since Montara and Macondo, there has been a strong focus on the other side of the bow-tie – recovery. When things go wrong, Government, regulators, and the communities in which we operate, look to us to fix it. Recovering the situation and mitigating impacts is suddenly front and centre. And if we don’t do this right, we quickly lose trust and our licence to operate.

So, in the aftermath of Montara and Macondo, we increased our focus on our recovery capability. We looked hard at ourselves and those with whom we do business, and sought to further improve our practices and standards.

We thought we were in a pretty good place, because in 2007 Shell looked at the increasing activity in deepwater drilling – more deepwater rigs and a potential dilution of competence in the drilling industry – and decided to do a major review of deep water capabilities and safety. This led to widespread improvement to our procedures, including updated well control standards, well design and completion standards, and contractor management standards.

After Macondo, we went further, incorporating a module on ‘advanced well-control’ into our mandatory well engineering training program, and we rolled out a real time well control tool that displays equipment compliance and testing, and drilling staff competence, allowing for early intervention if necessary.

Montara and Macondo taught us that that we need to dig deeper into the competence of our own people, our contractors and our subcontractors. While we’ve always been proud of our rigorous mandatory Master of Science equivalent training requirements for well engineers, we’re looking at further updating and extending this training and sharing it with others in the industry. Our blowout contingency plans, well and BOP equipment, and people and processes, were all reviewed to check they are where they need to be.

Does this mean we always get it right? No it doesn’t. But it means in the rare event something does go wrong in our operations, like it did in the North Sea a few months before Macondo, our multiple barrier system kicks in, and the crisis is averted.

All existing Shell wells in deep water around the globe can be capped, and a modular capping system, deployable by air, is available for emergencies. This Shell system complements other industry initiatives, and adds to global capability in the unlikely event that primary and secondary well control measures fail.

We’re working with industry groups such as OGP to increase industry capability in this regard. Joep Coppes spoke yesterday on this, and Keith Lewis will pick it up again later today when he covers the Subsea Well Response Project.

But as I said, Shell’s primary focus is on prevention. We look to our well plans, drilling protocols, and preventative safety procedures to keep us out of situations where recovery is necessary. Key components for us are: robust standards and design processes; people competence; contractor management; and equipment selection, certification and maintenance. Underpinning all of this, of course, and stealing some of Professor Hopkins’ thunder, there needs to be chronic unease.

Compliance, Intervention and Respect

If I can widen the context a little, every day we have over 90,000 staff and probably three times that number of contractors operating in a range of difficult offshore and onshore environments across more than 90 countries around the world. Making safety a conscious decision, and a priority, for each and every one of these individuals is a huge task.

We try to keep it simple. Shell requires commitment to three key behaviours - compliance with the law, standards and procedures; intervention in unsafe or non-compliant situations; and respect for ourselves, our partners and our neighbours.

At a global level, standards and operating procedures define the controls and physical barriers we require to prevent incidents. All of our companies, our operated joint ventures and our contractors, need to manage health, safety, security, environmental and social performance risks in line with Shell’s Commitment and Policy on HSSE & Social Performance, local laws and the terms of relevant permits and approvals.

Compliance is one of those areas where we, as leaders, always have work to do. And one of the challenging places for Shell in this regard is certainly Australia. If we want our workforce to comply, the rules need to be understood, valued, and enforced.

Simplicity is important, and over the past 3 years, we’ve developed and rolled out a single world-wide HSSE and Social Performance Control Framework. This replaced more than 55 different HSE guides spread across our operations. The new simplified framework has clear requirements that are applicable across all of our businesses. Each risk area has mandatory requirements and additional guidance. When procedures are not clear and simple, people take shortcuts, they think they know better . . . I often say ‘experience kills’.

We also introduced a set of 12 Life-Saving Rules. These rules are rolled out to every staff member and every contractor that works for Shell around the world. No matter where you are in the world, you need to follow these rules. If you choose not to, you choose not to work for Shell.

We’ve seen other industry players start to adopt similar rules and we are currently working with OGP in a joint effort to create a set of industry standard rules which members can select from, according to their risk profile.

Crucial in all of this is having a supportive culture. Rules, on their own, won’t achieve what we’re after. So we attach value to everyday things, in everyday business, with our Goal Zero campaign, and our global safety days where every leader fronts an engagement with their team – be they employees or contractors – to talk about Goal Zero and how every individual has a role to play, including accountability, for their own safety, and that of the people they work with.

Making safety count also means making intervention okay. No doubt we will hear more about this from Professor Hopkins building on his great work around mindful leadership and concepts like chronic unease. It’s about having an ‘intervention reflex’. Others have spoken about strategic distrust. The bottom line is to make it okay to interfere if that’s what it takes to get down to the detail – on process, as well as personal, safety, and asset integrity.

Feeding into this is an underlying respect for people. Beyond Shell staff, we focus on contractors and subcontractors – invariably, these are the folk in the front line of some of the more hazardous and risky parts of our business – so we’re constantly looking for new and innovative approaches to engage them and work in partnership.

If I take Shell’s Pearl GTL project in Qatar as an example, at the peak of construction there were 52,000 people employed on that project, from over 50 countries.

We had to create a purpose-built Pearl village to house them, but the village was more than a place to sleep; it provided a support network, learning opportunities, and a place to build a sense of community that was all about worker welfare – enjoying work, and in the process, staying safe and healthy.

We instilled a sense of community, and collective responsibility, and we think the mutual respect that underpinned those things was one of the contributing factors to the project’s record breaking achievement of 77 million man hours without a single injury that led to time off work.

If we look at the sorts of numbers Australia is looking to bring on in the LNG industry over the next 10 years, the challenges are similar – rapid growth, less experienced workers, multi-cultural backgrounds. We’re going to have to step us as leaders, and as an industry, if we’re to instill the sort of fundamental commitment to safety that we’ll need to grow the industry and retain our license to operate.

I believe that poor safety reflects poor leadership and poor management. Safety needs to be seen and felt in every aspect of the organisation. We work to empower and recognise people who do the right thing, build a sense of community and joint responsibility, and reinforce safety in the organisations’ values – both written and unwritten.

The safety journey is not one that ever ends, and incidents like Montara and Macondo underline that fact. There are always better and safer ways to do things, if we are prepared to learn.

It is also not a solo journey. The industry has an obligation to get it right, but so do the regulators and the taskforces that, all around the world, are looking at legislation and regulatory measures to create a common set of goals and a timeline. Through a combination of performance based and prescriptive measures, we think sustainable improvement is achievable.

Our default setting needs to be one of chronic unease – where we relentlessly ask ourselves what can go wrong, and whether we have the controls in place to prevent it. Leadership plays a key role in setting the tone. And there can be no higher priority for any of us.

Thank you for the opportunity to speak today.

Bio - Ann Pickard

Ann Pickard, Country Chair, Shell in Australia and Executive Vice President, Shell Development Australia

Ann came to Australia in March 2010 to take up the role of Executive Vice President Upstream Australia within the Shell Upstream International organisation, responsible for the exploration, production and gas commercialisation part of Shell’s Australian business.

Since then, her role has expanded to Country Chair of Shell in Australia, adding oversight of the manufacturing, chemicals, supply and distribution, retail, lubricants, trading and shipping, and alternative energy parts of the business.

Described by Fortune Magazine as the bravest woman in oil and one of the 50 most powerful women in business, Ann was Shell’s Regional Executive Vice President for Sub Sahara Africa, based in Lagos Nigeria, for the past 5 years. In that role she oversaw the company’s exploration & production, gas and LNG activities in the region.

Before that, Ann was Director, Global Businesses and Strategy and a member of the Shell Gas & Power Executive Committee with responsibility for Global LNG, Power, and Gas & Power Strategy.

Ann came to Shell in 2000, leaving Mobil upon the merger with Exxon. She has significant business experience throughout South America, the countries of the former
Soviet Union, the Middle East and Africa.

Ann has an MA from the University of Pennsylvania and a BA from the University of California, San Diego. She has recently joined the Board of the Energy & Minerals Institute, University of Western Australia. She is married and has two children.

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