Feeling the heat: Sector-specific guidance to protect value and managing risks

The oil and gas sector is going through a major shake-up. Many of the sector leaders are looking towards increased standardization as a way of becoming more efficient and surviving in very challenging circumstances as they shift their strategies towards becoming 'energy' companies and incorporate renewables into their portfolios.

Industry leaders such as BP, Total and Shell have made firm commitments to long-term net zero targets. BP, for example, has committed to reducing oil and gas production by 40% with no exploration in new countries and lowering the carbon intensity of products it sells by 15% by 2030.

This is all before the impact of the Covid-19 pandemic on the sector which has made the market even more challenging. Air travel has been slashed and cars are being used less frequently, further reducing demand. Even after the pandemic is over, demand for oil and gas products is predicted to continue to decline with initiatives such as the increased use of electric vehicles.

“The Oil and Gas sector is feeling under pressure as an industry and looking at ways it can become more efficient and environmentally friendly,” said Bernard Shelley, Lead Standards Development Manager at BSI.

The publication of ISO 29001, providing sector-specific requirements and guidance on quality management systems, should help the sector respond to the increasing pressure to become more efficient.

ISO 29001, Sector-specific quality management systems - Requirements for product and service supply organizations, has been developed to help with the transition. It incorporates latest sector best practice, providing risk-based quality management and conformity assessment requirements and guidance.

The standard was developed in parallel with ongoing joint industry standardization projects which are aimed at reducing waste and duplication by simplifying and making procurement systems more consistent.

 “Risk in the supply chain can be significantly reduced and value enhanced by companies using ISO 29001,” said Bernard. “It mirrors the structure of ISO 9001, the foundation quality management standard, with sector-specific guidance and information provided at each stage of the ISO 9001 process.”

The use of the standard helps promote standardization in the sector, protecting value and managing risks and opportunities while ensuring regulatory compliance. It should also help assure the safety, reliability and operating integrity of components provided by suppliers to the sector.

“ISO 29001 has the potential to drive improvement in the Oil and Gas sector,” said Bernard. “The alignment with ongoing standardization projects and complementary quality, technical and conformance standards should provide organizations with the tools and guidance they can use to identify and manage supply chain risks and deliver optimum value.”

It is anticipated that the standard will also support the sector in delivering value as it moves towards its low carbon, alternate energy and renewables targets; “The principles, requirements and guidance within the standard are just as applicable to these product and service supply organizations,” said Bernard.

ISO TC67/ Working Group 2 is now working towards developing a certification scheme and competency requirements for ISO 29001 auditing and certification.

As energy costs continue to rise and climate change concerns grow in the public consciousness, low-carbon technology will play a significant role in the world’s future energy plans. It is no longer a question of if the UK will fully embrace the low-carbon economy. Rather, how efficiently we can manage the transition. ISO 29001 is only one of the multiple standards Oil & Gas, major actors in the net zero transition, can apply to fully commit to optimize and decarbonize their operations.

 

This article is part of Standards Outlook issue six, the UK standards body's quarterly themed e-zine.

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