managing risk in a changing environment

 June 1, 2007

Launched 15 years ago, ExxonMobil's Operations Integrity Management System continues to guide the company's global operations.

Every day, ExxonMobil workers around the world produce, process and transport several million barrels of crude oil, gasoline and other petrochemical products. Helping to enable the organization to do so while minimizing the risk of an injury, illness, security breach or spill is the purpose of the company's Operations Integrity Management System (OIMS), an initiative launched 15 years ago.

"The 1980s saw several major incidents in the oil and chemical industries," says Mike Henderek, safety manager in ExxonMobil's Safety, Health and Environmental (SH&E) Department. "Our company was not immune, as we experienced the Valdez oil spill in 1989."

Following that regrettable incident, Exxon's senior management decided that a new approach was needed to foster the integrity of the company's global operations. A task force of experienced employees analyzed safety, health and environmental incidents that had occurred inside and outside of Exxon.

What emerged from this study was the realization that the company could achieve major improvements in the integrity of its operations by becoming more systematic and disciplined about what was expected of managers and workers. The study resulted in the Operations Excellence Program, precursor to the Operations Integrity Management System.

While Exxon was developing its new approach to managing safety, health and environmental performance, Mobil Corporation was engaged in a similar process. Following the 1999 merger, OIMS was deployed across the newly formed company.

A system of management systems
At its core, OIMS is a system of management systems designed to identify hazards and manage the associated risks. OIMS provides the discipline and structure to foster safe, secure and incident-free operations to explore for, produce, transport, process, distribute and market energy and chemical products.

OIMS comprises 11 elements, each with clearly defined objectives that every operation is expected to meet. These elements provide a framework for 64 expectations that address key aspects of safety, security, health and environmental management, from new project inception to ongoing operations. OIMS helps operating organizations have the resources, skills, processes, procedures and tools they need to perform work safely and without incident.

"From the beginning, this system has always been called an operations integrity management system, not a safety, health and environmental system," Henderek says. "We want to foster the integrity of our operations, protect workers and communities, and promote the correct use of our products. So OIMS goes beyond the ExxonMobil work force."

Responsibility for implementing OIMS rests with ExxonMobil's line managers rather than the company's SH&E organization. "We're here to advise and assist the business units," Henderek says. "We're enablers.

"But it's the operating managers who own the systems, and it is they who are held accountable for conformance with requirements," Henderek adds. "Obviously, before OIMS was in place, our line managers were responsible for safety and environmental performance. But with OIMS, we now have a corporate-wide set of consistent expectations and best practices that apply to every operation."

Assessing performance is key
From Baton Rouge to Bangkok, every operating unit's safety, security, health and environmental performance is evaluated annually by an internal assessment that gauges performance against OIMS expectations. Results are reported to management, and improvements are implemented.

Every three to five years, another evaluation is conducted by a team of 10 to 12 employees from outside the unit being examined. Such assessments, which last from one to three weeks, are performed by line managers and specialists drawn from comparable organizations.

For example, the manager of an ExxonMobil refinery in Japan might lead an assessment of a company refinery in Italy. In addition to the operating unit benefiting from a "cold eyes" assessment by its peers, team members return to their regular jobs with a broadened understanding of the importance of operations integrity, plus first-hand knowledge gained from the assessment that can often be applied in their home organizations.

From its inception, OIMS has undergone continuous improvement to make the system more useful and effective. "Even though we've been doing this for 15 years, we're constantly looking for ways to make OIMS better," says Steve Polkey, SH&E manager for ExxonMobil's Downstream and Chemical operations. "We regard improved performance as a journey, not a destination."

Two such enhancements are the addition of Global Manufacturing OIMS Practices (GMOPs) in refining and chemicals, which provide more detailed and consistent guidance on six critical process-safety oriented systems, and the Facilities Integrity Management System used across oil and gas production.

Other enhancements include OIMS expectations relating to the physical security of company facilities; the use of Environmental Business Planning to better integrate environmental factors into the company's business planning process; and "Best Practices in External Affairs," a system to help strengthen ties between the company and its communities.

Impressive results
The use of OIMS to guide company operations has led to notable improvements in ExxonMobil's safety, security, health and environmental performance. "In 2001, we were a leader among major oil companies in spill performance," says Rick Mire, environmental manager in the corporation's Irving headquarters. "We're still the leader today, and we've reduced spills by more than 50 percent since 2001. OIMS is one of the keys to that improvement."

Worker safety also has improved dramatically since the inception of OIMS to fewer than five lost-time incidents per 10,000 workers each year. "When you look at the numbers, people who work in our facilities are more than 10 times safer today than they were before OIMS," says John Kuney, safety, risk and operations integrity manager in ExxonMobil's Upstream SH&E organization. "That's because through OIMS, our work processes are more clearly described, risks are identified and mitigated, critical procedures are in place and followed, and the entire work force understands its responsibilities. OIMS has really made a difference in safety."

OIMS covers all workers at company facilities, including contractors, who today account for about half of ExxonMobil's global work force. "We select contracting companies that have competent, well-trained employees," Henderek says. "Then we provide them relevant safety training and integrate them into our operations.

"Some of these contractors have worked for other companies where expectations are different than at ExxonMobil. So we work closely with contractor management with the objective that each contract worker understands and complies with OIMS expectations. As a result, the lost-time incident rate for our contractors is about the same as that of ExxonMobil employees, something few other companies have accomplished."

David Furry, co-founder of Leak Detection Systems, is one such contractor. "OIMS does a great job helping protect against environmental incidents," he says. "We're glad to be part of the program."

Improved reliability has financial benefit
A safe, secure and incident-free operation is a reliable operation. Improved reliability leads to higher production and lower costs. Since implementing OIMS 15 years ago, ExxonMobil has experienced fewer incidents, and its operations have become more reliable. That's a key reason why the company's return on capital employed is higher than that of its major competitors.

"Because we operate in so many countries and in so many cultures, having a consistent approach with consistent standards and expectations is critically important," Henderek says. "And while we're proud of our progress, we will never be complacent, because no organization is immune from the risk of incidents. Injuries can — and do — still happen, so we know we're not yet where we want to be. Until 'Nobody Gets Hurt,' we won't be satisfied.

"We want to continue to improve OIMS because we know that it will help make our operations even more safe and reliable. We owe that to our work force, our communities and our shareholders."