Risk Management – Global Approach, Local Solutions
Rodney Azevedo
Chevron Oronite Company
Maua, Sao Paulo
Brazil
AZEV@chevron.com
Neuza Ferreira
Chevron Oronite Company
Maua, Sao Paulo
Brazil
NeuzaFerreira@chevron.com
Anne O’Neal
Chevron Oronite Company
San Ramon, California
AnneONeal@chevron.com
ABSTRACT
Systematically and consistently identifying risks is the critical first
step in managing Process Safety. In designing a new processing
facility, or managing risk in an existing facility, ranking of the
relative risks allows companies to focus their resources on the
changes which could have the biggest impact on reducing their
overall risk. Chevron’s approach evaluates risks to safety, the
environment and health. Relative prioritization of these risks within a
plant, within a business segment or across the enterprise has
provided a sound basis for Process Safety improvement.
This paper will present an overview of this global approach, a
comparison to Brazilian regulatory requirements and some examples
of risk reduction in the specialty chemicals business.
A more comprehensive description of the Chevron HES Risk
Management approach was presented at the 2008 SPE International
Conference on Health, Safety, and Environment in Oil and Gas
Exploration and Production held in Nice, France, 15–17 April 2008.
SPE 111769
Meeting the Challenge of Technology Advancement: Innovative
Strategies for Health, Environment and Safety Risk Management
J.M. Bruney and D.W. Jones, Chevron Energy Technology
Company
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1. GLOBAL APPROACH
1.1 Managing Risks in Our Daily Lives
Each of us manages risk in every aspect of our daily lives. As we move from
place to place as pedestrians, drivers or passengers we face the deadly hazard of a
traffic accident. In many countries, today’s roads are markedly safer than the roads of
yesteryear. As a society we manage this risk in fundamentally two ways: reduce the
likelihood and reduce the potential consequences.
We minimize the likelihood through a mix of engineering controls (speed limits,
traffic signs, controlled intersections, divided roads, headlights and road lighting,
mirrors, sidewalks and crosswalks, anti-lock brakes, “black box” driving monitors on
commercial vehicles, fences to keep animals off roads, all-weather tires, etc.) and
administrative controls (tested and licensed drivers, adults holding the hands of
children as they learn to safely cross streets, alert pedestrians, bright and reflective
clothing for roadway workers, defensive driving skills, rested and alert drivers,
alcohol/drug-free drivers, road safety laws, public safety officers, checking tire
pressure). We reduce the potential consequences through things like air bags, seat
belts, crumple zones and roll bars.
Countries that have implemented a structured approach and put a public emphasis
on Road Safety have greatly reduced the risk of road deaths around the world.
They’ve taken a complex system of roadways, vehicles and people – identified the
highest risks first and systematically added better and better controls. In the early
1960s, car buyers had to pay extra for seat belts in the back seat. Since that time seat
belts have become standard. Many other safeguards, such as anti-lock brakes or air
bags were also once considered optional. Today these safeguards are also often
considered standard.
1.2 Managing Industrial Risks
Managing risk in the chemical process industry is, in principle, no different. In
practice, however, it can be even more complicated. The chemical plants, oil
production facilities, refineries, power plants and food processing plants operating
today have been built over a number of years, innovating and adapting to the
changing needs of our customers and along the way adopting new and innovative
engineering and administrative controls to continually reduce the risk these operations
pose to workers, the public and the environment.
For a plant manager, deciding where to make the next investment in risk reduction
can be a tough challenge. For the manager with several facilities that manufacture a
variety of products in a variety of countries the challenge is tougher still.
To meet the challenge of protecting workers, communities and the environment,
Chevron has adapted an approach to draw upon best practices, experience, and
science across a range of technical specialty areas within the health, environment and
safety (HES) fields, and integrate this knowledge into a single, structured
comprehensive procedure we call RiskMan2. Within the context of a corporate-wide
risk management process, the RiskMan2 procedure helps to ensure rational and
consistent HES risk management.
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A key to RiskMan2 is the recognition that HES risks do not act as independent
variables, but they are highly interdependent. A holistic view of risk with clearly
defined mechanisms for assessment, prioritization and action is critical. RiskMan2
provides the structure and tools to achieve this integrated picture and to understand
risk trade-offs. RiskMan2 also provides a framework for identifying and
appropriately applying continually advancing HES science and technology. More
than ever, it is critical to have a robust decision framework to guide the use of HES
tools so that they can be optimally applied in a business context.
1.3 Introduction
Chevron has developed and implemented a risk management process to provide a
corporate-level framework for the management of HES risks. The process addresses
risks from incidents (events), activities and ongoing practices. The process has been
developed in a manner consistent with all processes within Chevron’s Operational
Excellence Management System. As such, it is a structured process that contains a
stated purpose, objectives, and scope. Roles, resources and requirements have been
agreed and clearly defined. Measurement and verification as well as continuous
improvement mechanisms have been put in place. Most critically, the process has
established a single, common risk assessment and management procedure –
RiskMan2.
1.4 Methodology
The RiskMan2 Procedure (Figure 1) is comprised of the following five major
steps:
 Step 1: Identify and Prioritize – Identify and rank all facilities and activities
such that higher priority assets are addressed first.
 Step 2: High-Level Risk Assessment – Conduct a high-level risk assessment
based on established hazard identification techniques which we refer to as an
Integrated Hazard Identification or “IHAZID.”
 Step 3: Further Risk Assessment – Identify and appropriately applying HES
risk assessment science and risk mitigation technologies. Ultimately, the goal
is to improve understanding of risk while optimizing application of risk
assessment tools in a business context.
 Step 4: Risk Reduction and Closure – Ensure that closure of risk reduction
items is timely, documented and aligned with the Chevron Way. Criteria for
determination of whether a risk is actionable are key components of this step.
Actionable risks require mitigation and are subsequently incorporated into a
mandatory risk reduction plan. Action items within the risk reduction plan are
tracked to verify that mitigation measures meet closure criteria.
 Step 5: Periodic Revalidation – Step 5 ensures that prior risk assessments are
reviewed and updated, as necessary, at specified intervals or with significant
facility changes.
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2
Starting Point
Asset/Project With
Widely Varying
Types of Facilities
and Hazards
Sub-Procedure 5
Periodically
Revalidate
E
H
S
Risk Following
Mitigation
Sub-Procedure 1
Identify, Group
and Prioritize
Sub-Procedure 2
Perform High Level Risk
Assessment to Identify
HES Risks and Determine
Further Risk Assessment
needs
SubProcedure 4
Develop Risk
Reduction Plan
and Document
Closure of
Sub-Procedure 3
Actions
Perform Targeted Detailed
Risk Assessments
Health
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Environment
E
H
Safety
S
High Level HES
Risk Profile
Figure 1. RiskMan2 – A five-step risk management procedure.
1.5 Integrated Hazard Identification Study (IHAZID)
The IHAZID concurrently evaluates health, environment and safety (HES) and
certain asset risks in a high-level qualitative risk assessment, which is facilitated by a
Qualified Facilitator with expertise in major hazards analysis and co-facilitated by an
Environmental/Health/Social Facilitator. The objectives of the IHAZID are to identify
major HES risks and determine the additional assessments that will be conducted to
fully understand and address the risks. The IHAZID study may also identify areas
where initial risk reduction should be implemented.
The IHAZID process utilizes standard hazard identification methodologies to:
identify hazards; brainstorm possible events of concern; determine potential
consequences; identify safeguards or controls in place; risk rank the event using a
corporate-wide 6x6 risk matrix and apply it sequentially for HES and asset risk, as
applicable (Figure 2). This structured approach identifies initial areas where risk
reduction should be considered and initial recommendations are developed.
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ive
Ri
sk
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an
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e
Cr
ite
ria
Figure 2. Qualitative 6x6 risk ranking matrix for health, environment, safety and asset
risk.
The results of an IHAZID can be represented in a three dimensional 6x6 matrix
which provides a summary of the risks posed by the various activities, and a basis for
prioritizing detailed risk assessment called a risk profile. Setting expectations for
reducing elevated risks becomes the basis for company level resource and capital
planning. As risk reduction plans are developed and implemented, facility profiles
can be further aggregated to provide a risk profile for a group of facilities and
graphically represent the reduction of the risk profile over time to track the impact of
facility action plans are implemented as risks are mitigated. (Figure 3)
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Figure 3. Conceptual representation of change in risk profile after mitigation.
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2. LOCAL SOLUTIONS
Like they do for traffic safety, governments around the world are adopting
regulations to improve the safety of their chemical and processing industries. The risk
management approach taken by a multi-national company has to be simple enough to
implement around the world, and applicable enough to help facilities or operations
comply with a variety of regulatory approaches around the world. We would like to
provide you with an example of how we’ve mapped Chevron’s RiskMan2 approach
to risk management regulation in Brazil.
We will then provide a few examples of risk mitigation activities from Chevron
Oronite’s Maua plant, here in Sao Paulo, to illustrate some of the activities underway
throughout Chevron to mitigate risks identified through the process.
2.1 Use of Riskman2 to Meet to Brazilian Regulations
The predominant use of the risk analysis study takes place during the
environmental licensing of potentially generating sources of environmental accidents.
Risk analysis studies for facilities located in the State of Sao Paulo are required by
Companhia Ambiental do Estado de Sào Paulo (CETESB) and are intended to
prevent environmental accidents that could endanger the health and safety of the
people, and the environment. Guidance on study format, content and acceptability
criteria is provided through norm P4.261.1
The manual is divided in two parts:
 Part I - Criteria for the hazard classification of industrial facilities. The
hazard classification determines whether or not a risk analysis study is
required during the environmental licensing process.
 Part II - Reference terms for the preparation of the Risk Analysis studies.
This provides the basic guidelines for the preparation of the risk analysis
studies and presents the vision of CETESB regarding the interpretation
and evaluation of results. The RiskMan2 methodology meets the following
State requirements:
1. The risk analysis study (RAS) in industrial activities in the State of
São Paulo aims the risks assessment to the population outside the
enterprise in six steps:
a. Characterization of the development and the region
b. Hazard identification and consolidation of accidental
hypotheses
c. Estimation of the physical effects and vulnerability analysis
d. Estimation of frequencies
e. Estimation and risk assessment
f. Risk management
The guide also presents a guide for the development of a Risk Management
Program (RMP).
“Guidance Manual for the Preparation of Risk Analysis Studies, May 2003,” developed by the
Working Group of the Environmental Chamber of the Chemical and Petrochemical Industry.
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There is another regulatory norm which requires an Environmental Risks
Prevention Program (PPRA - Programa de Prevenção de Riscos Ambientais), which
addresses the health and safety of the workers through the anticipation, recognition,
evaluation and further control of the environmental risks in the workplace.
Ordinance n25 of December 29, 1994, addresses measurement and control of the
environmental risks in the workplace, including the methodology of the Risk Map in
the Regulatory Norm NR5 – CIPA (Comissão Interna de Prevenção de Acidentes).
Riskman2 provides the basis for assessment and classification of major occupational
risks.
2.2 Internationally Recognized HES Management Systems
RiskMan2 helps to meet elements of a number of internationally recognized HES
Management systems. Most recommend a high level assessment of risks, further
evaluation of risks identified and actions put in place to appropriately mitigate theses
risks. Examples of such system are described below.
2.2.1 Industrial Hygiene – American Industrial Hygiene Association(AIHA)2
The American Industrial Hygiene Association (AIHA) provides guidelines for
implementation of an efficient and effective program for managing industrial hygiene
risks. RiskMan2 provides the tools for risk assessment and informs plans for health
risk exposure assessment. The AIHA guidelines include the following steps:
 Step 1 – Assess exposure as a component of risk and determine an exposing
rating
 Step 2 – Assess health effects as a component of risk and determine a health
effects rating
 Step 3 – Compute health risk rating
 Step 4 – Assess uncertainty as a component of risk and determine an
uncertainty rating
2.2.2 Responsible Care
Responsible Care is a comprehensive HES management system which has been in
place in the chemical industry for many years. Use of this management system is a
membership requirement for many National Chemical Associations including the
American Chemistry Council of which Chevron Oronite LLC is a member. Risk
identification and mitigation are integral to Responsible Care as illustrated in some
requirements outlined below.
 Exposure assessments and safety analyses to evaluate health and safety
hazards to employees from processes; equipment; potentially hazardous
substances, physical, or biological agents; or other worksite conditions.
 Periodic assessment and documentation of process hazards and
implementation of actions to minimize risks associated with additive
operations, including the possibility of human error.
Source: A strategy for assessing and managing occupational exposures – second edition John R.
Mulhausen and Joseph Damiano ( a publication of the AIHA( American Industrial Hygiene
Association)
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2.2.3 International Organization for Standardization (ISO) 14001
The identification, prioritization of “Environmental Aspects” and mitigation of
significant are the starting point for ISO 14001. Element 4.3.1 states that an
organization shall establish, implement and maintain a procedure(s):
 To identify the environmental aspects of its activities, products and services
within the defined scope of the environmental management system that it can
control and those that it can influence taking into account planned or new
developments, or new or modified activities, products and services, and
 To determine those aspects that have or can have significant impacts on the
environment (i.e., significant environmental aspects).
2.2.4 Occupational Health and Safety Assessment Series (OHSAS) 18001
This health and safety management system is intended to help an organization
identify and control occupational health and safety risks and to improve overall health
and safety performance. It contains elements intended to guide the development of a
management system and addresses risk through element 4.3.1. "Hazard identification,
risk assessment and controls determination”, where the organization must implement
procedures for hazard identification and risk assessment.
2.3 Risk Reduction in Action
Oronite manufactures hundreds of fuel and lubricant additive packages for all
types of diesel, gasoline and natural gas engines as well as additives for gear oils and
hydraulic fluids. It is the worldwide market leader in a number of areas, including
Marine, Railroad and Natural Gas Engine Oils and Tractor Hydraulic Fluids. The
Maua plant was built in 1978 and started operations in 1980.
The manufacture of additives involves a complex set of chemical reactions and a
wide variety of raw materials, which may not be particularly relevant to the risks
most of you manage in your operations. While we have a variety of risk mitigation
efforts underway in our manufacturing area, the examples we want to share with you
today are in our finishing, blending and storage activities.
2.3.1 Reducing Risk in Finishing Tanks
One of our finishing steps we call air blowing. It involves slowly bubbling a small
amount of air into the product in a stirred tank until the product meets what is called a
“copper strip specification”. Air blowing has been done safely in tanks for decades,
and is performed by trained and qualified operators with procedures describing the
limits of safe operation. However, through detailed risk assessments it was
determined that there were some unlikely scenarios where failure of some of the
safeguards could result in pressure building in the tank.
To eliminate this risk we designed a specialized low pressure vessel in which to
conduct this air blowing process. With customized improvements to the inside of the
vessel and improved instrumentation and controls, this is not only a safer process, it is
significantly more efficient and reliable as well.
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2.3.2 Reducing Risk of Storing Volatile Material
Another finishing process we conduct involves stirring product in a tank to
remove small amounts of volatile material. This was another tank which we
determined that under certain unlikely conditions, larger amounts of volatile material
could be introduced and could also result in pressure building in the tank. To
eliminate this risk, we designed a wiped film evaporator to remove the trace amounts
of material before it is put into the storage tank.
This move to pressure vessels not only eliminated the risk of an increased
pressure in these tanks, but we were able to capitalize on the changes to make the
process more efficient as well. We were also able to put these old tanks to use in
storage or blending service, increasing our storage capacity and blending flexibility.
2.3.3 Reducing Corrosion Risk in Tanks
In a business like ours, where we manufacture hundreds of additives packages,
some of our most important assets are storage and blending tanks. Some of the
components we use have a high viscosity and we blend and store them in heated,
insulated tanks. Corrosion under this insulation is not easy to see, and presents the
risk of spills and business disruption.
To avoid this type of corrosion we redesigned our entire approach to insulation,
minimizing water ingress and increasing the ability of the insulation to self drain if it
does get wet. We also devised an approach to and to measure the effectiveness of the
overall protection against water/moisture penetration between metal and covering.
By utilizing the structured, risk based assessment we develop an investment
approach at each facility which promptly addresses the highest HES risks, while still
allowing for smaller but steady investment in the reduction of the lower risks which
require multi-year investment programs to complete.
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