Histoire de l'entreprise ZOR (document en anglais)

Company Background

ZOR is a state-owned oil refining complex mainly consists of two refineries, asphalt plant, utilities and offsite facilities. The complex processes used to be monitored and controlled by very conventional pneumatic control system. ZOR management had decided to modernise this system using Distributed Control System (DCS). ZOR organisation does not contain Risk Management department, while it has Loss-Prevention department takes care of HSE aspects.

Project Overview

After finalising the Prequalification (PQ) process of selecting the best companies to execute this project, ZOR called for tender (bid). The proposals evaluation focused mainly on Price and Terms and Conditions, whereas the Risk procedures were neither well-covered by all bidders nor considered by the evaluation committee. The project was then awarded to the cheapest offer at about LD100 million. The project is deemed complicated having a challenge of replacing an old system by new one while keeping the units in operation due to the fact that ZOR had to meet the market dues and its governmental commitments.

HAZOP Study

From a conversation between the author and both project manager and HSE specialist in April 2014, the least two confirmed that the only remarkable risk aspect addressed by the project team was the hazard and operability (HAZOP) study that applied to deal primarily with DCS installation consequences.

HAZOP study is a detailed procedure/approach to examine systematically a well-defined operation or process either existent or planned (Crawley et la. 2008). Khan and Abbasi (1998) argued that the most risk assessmnet examinations are partially formed by HAZOP study which includes a thorough study of the whole process line from beginning to end with the piping and instruments diagrams (PIDs) assistance. Also HAZOP studies PIDs with-respect-to the (i) the process operation; (ii) the causes which may change the plant operation dut to material/process malfunctions or human errors; and (iii) probable consequences.

Project Major Accidents

According to Simon et la. (1997), this project had some uncertainties created an exposure to risk that failed to remain within budget because of several losses of production, and increased the project completion time.

The project took time longer than the scheduled and cost more than the contract price due to uncertainties and unexpected/unanalysed risks that took place during the execution stage which their major accidents are listed below. Stopping the refinery is very costly and its start-up takes two days, and that is why the majority of DCS activities had to be performed while the plant is in operation, and some critical installations had to be executed during the annual turn-around period when the plant is totally shut down for maintenance.

1. Some partial operation shutdowns in different unites happened during the installation and when changing-over between the old and commissioned system. Although these accidents did not affect the project critical path (unchanged project duration), they relatively disrupted the operations.

2. One entire refinery (Unit-2) shutdown occurred while working on the power generation system that caused by human error. This accident is uncertain which severely disrupted the production, however, if it had been considered from the beginning as a risk with estimated probability, it would have served the project by utilising the off unit in implementing some of the critical activities that must be made only during the shutdown whereby the delay of the next point-3 could have been saved. Due to the fact that the load-shedding system was inefficient for years, and as it was part of the work scope, it could not avoid this accident by shedding out some insignificant loads to keep the that refining unit runs.

3. The most dangerous and critical activities were planned to be implemented during the ten days turn-around period. According to (E&Y, 2010 p.1) which says: “A company’s risk appetite is the amount and type of risks it is willing to accept in pursuit of its business objective.”, the project management accepted to take the risk of adding one day as a contingency. However, the contractor could not complete all tasks even with this extra period which obliged ZOR top management to grudgingly decide extending the turn-around for another extra day. This threat would have been mitigated, if the opportunity in the previous point-2 had been utilised. The main reason behind this delay was the mis-coordination between the project and the turn-around teams which caused congested operation zone with overstaff and with different conflicted activities of DCS and turn-around at the same time. One day off production costs ZOR about LD30 million.

Risk Analysis

Apart from HAZOP study, it seems from the above, the risk analysis was not well-considered. Risk Analysis is a process of identifying risks and then classifying them with respect to their consequence and likelihood, and counting how to best manage them (Law, 2009).

Risk-analysis is the identification of the most likelihood threats to a project and the analyse of project vulnerabilities to those threats.

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