Loss Control A Business Opportunity
Authors: Robertson Michael R. , Gordon Steve 
Published: March 2010

Loss control can be implemented as a routine part of the operation of a major oil and gas company. Implementing tile activity requires program effort from senior management to the online operators in an organized and consistent way.

The major program components of a loss control program are described, and include managerial support, technical support, training, event reporting, data analysis, and actions to commend and correct. A disciplined system of follow-up on recommendations is required.

Application of loss control will ultimately reduce costs by improving operational effectiveness, and will also affect more traditional loss control indicators such as recordable injury frequency and preventable vehicle accident frequency. Determination of the true value of a loss control program, however, requires a more complete information base analyzed in a way which identifies the cost relevant components of the program, which should be followed to meet the specific needs of the company.

Introduction

Modern business requires that, as a component of profitability, companies move not only to maximize income, but to minimize loss. In this context, loss includes such thing as injuries to people, damage to equipment, and production interruptions.

Petro-Canada Resources is an upstream oil and gas company which produces from western Canada 5.2 × 106 m3 of oil, 4.4 × 109 m3 of natural gas, and 766 K 103 m3 of natural gas liquids per year. The company is also an active explorer of both provincial and frontier properties.

As an employer of approximately 1350 people, as well as a user of the services of many contractors for drilling, plant construction, pipelining, technical services, etc. Petro-Canada has a high degree of concern for the safety of people working on its behalf. In addition to personnel safety, the corporation has adopted the position that a wider loss control focus will not only further improve employee safety performance, but will also result in substantial dollar savings through the prevention of accidents, the development of proper work procedures, improved employee contributions to operational programs, reduced equipment downtime, and avoidance of business interruption. In that spirit, over the last few years, the company has implemented a comprehensive loss control program across its operations. The components of this program meet most, if not all, of Smith's (1988)(4) thirteen points for an improved loss control management program based on Deming's(3) theories outlined in his book Quality. Productivity and Competitive Position.

Experience from another division of Petro-Canada Inc. has shown that there are tangible benefits from the implementation of a program of this nature. Figure I shows the decrease both in numbers and severity (as reflected by costs including lost revenue) of fires in a major facility as the loss control program proceeds. Figure 2 indicates [he trend lines of decreasing recordable injuries, at two major facilities, over a five-year time frame. These types of results are typical of those to be expected within a corporation which implements a meaningful loss control program.