12

STANDING COMMITTEE ON PETROLEUM & NATURAL GAS

(2011-12)

FIFTEENTH LOK SABHA

STRY OF PETROLEUM & NATURAL GAS SAFETY OF OIL INSTALLATIONS

LOK SABHA SECRETARIAT NEW DELHI

May, 2012/ Vaisakha, 1934 (Saka)

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TWELFTH REPORT

CP&NG No. 12

STANDING COMMITTEE ON

PETROLEUM & NATURAL GAS

(2011-12)

(FIFTEENTH LOK SABHA)

MINISTRY OF PETROLEUM & NATURAL GAS

SAFETY OF OIL INSTALLATIONS

Presented to Lok Sabha on 22.5.2012

Laid in Rajya Sabha on 22.5.2012

LOK SABHA SECRETARIAT

NEW DELHI

May, 2012/ Vaisakha, 1934 (Saka)

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CONTENTS COMPOSITION OF THE COMMITTEE ……………...

(iv)

INTRODUCTION …………………………………………… (vi)

REPORT PART-I

Chapter-I Introductory

Legislative Framework Chapter-II Safety Mechanism in oil and gas installations

Oil Industry Safety Directorate Jurisdiction of OISD Safety measures in private sector Safety factors in new installations Safety audits Stoppage due to safety consideration Accident/incident investigations Training Oil spill

Chapter-III M.B.Lal Committee recommendations Issues raised by industry on amended standard

Chapter-IV Procurement related issues HVLR monitor

Rim Seal fire protection system Hydrocarbon detector Double fire contingency Replacement of Hammer blinds Provision of MEFG

PART II Observations/Recommendations of the Committee ……………

ANNEXURES I Implementation Status of Major items of M. B. Lal- Committee

recommendations

II List of OISD Standards III Minutes of the Thirteenth sitting of the Committee (2010-11) held on

26.07.2011

IV Minutes of the Second sitting of the Committee (2011-12) held on 31.10.2011

V Minutes of the Seventh sitting of the Committee held on 29.3.2012 VI Minutes of the Ninth sitting of the Committee held on 16.4.2012 VII Minutes of the Eleventh sitting of the Committee held on 21.5.2012

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(iii)

COMPOSITION OF THE STANDING COMMITTEE ON PETROLEUM & NATURAL GAS (2011-12)

Shri Aruna Kumar Vundavalli - Chairman Members

2 Shri Vikrambhai Arjanbhai Madam Ahir

3 Shri Badruddin Ajmal

4 Shri Ramesh Bais

5 Shri Sudarshan Bhagat

6 Shri Sanjay Singh Chauhan

7 Smt. Santosh Chowdhary

8 Shri Raosaheb Dadarao Danve

9 Shri Kalikesh N. Singh Deo

10 Shri Mukeshkumar Bheravdanji Gadhvi

11 Shri Dilipkumar Mansukhlal Gandhi

12 Dr. Thokchom Meinya

13 Shri Mahabal Mishra

14 Shri Kabindra Purkayastha

15 Shri M.B. Rajesh

16 Shri C.L. Ruala

17 Shri Brijbhushan Sharan Singh

18 Shri Dhananjay Singh

19 Shri Uday Pratap Singh

20 Shri C. Sivasami

21 Shri Thol Thirumaavalavan

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Rajya Sabha

22 Dr. Akhilesh Das Gupta

23 Shri Ahmed Patel

24 Smt. Gundu Sudharani

25 Dr. Prabha Thakur

26 Prof. Ram Gopal Yadav

27 Shri Sabir Ali

28 Shri Pankaj Bora

$29 Shri Tapan Kumar Sen

#30 Shri Shankarbhai N. Vegad

#31 Shri Mansukh L. Mandaviya

SECRETARIAT

1. Shri A.K.Singh Joint Secretary

2. Smt. Anita Jain Director

3. Shri H.Ram Prakash Deputy Secretary

________________________________________________________________

#Nominated to the Committee w.e.f. 4.5.2012 $ Re-nominated to the Committee w.e.f. 4.5.2012 *Shri Kalraj Mishra ceased to be Member of the Committee consequent upon his resignation from Rajya Sabha w.e.f. 21.3.2012 @ Shri Vijay Kumar Rupani ceased to be Member of the Committee consequent upon his retirement from Rajya Sabha w.e.f. 2.4.2012 and Shri Silvius Condpan ceased to be Member of the Committee consequent upon his demise w.e.f. 10.10.2011

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(v) INTRODUCTION

I, the Chairman, Standing Committee on Petroleum & Natural Gas having been

authorised by the Committee to submit the Report on their behalf present this Twelfth

Report on ‘Safety of Oil Installations’.

2. The Committee took evidence of the representatives of the Ministry of Petroleum

& Natural Gas at their sittings held on 26.7.2011, 31.10.2011, 29.3.2012 and 16.4.2012.

3. The Committee considered and adopted the Report at their sitting held on

21.5.2012.

4. The Committee wish to express their thanks to the representatives of the Ministry

of Petroleum and Natural Gas and the Public Sector Undertakings/Organisations

concerned for placing their views before them and furnishing the information desired in

connection with examination of the subject.

5. The Committee also place on record their appreciation for the invaluable

assistance rendered to them by the officers of the Lok Sabha Secretariat attached to the

Committee.

New Delhi; 21 May, 2012 31Vaisakha, 1934 (Saka)

ARUNA KUMAR VUNDAVALLI, Chairman, Standing Committee on

Petroleum & Natural Gas.

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REPORT

CHAPTER - 1

Introductory

Oil and gas sector comprising of crude oil, petroleum products and refinery is a

core sector of the economy and therefore, has a significant role in the nation’s

economic development. This sector is of strategic importance and play a pivotal role in

addressing country’s energy concerns thereby influencing decisions on all other

spheres of economy. The sector has been witnessing steady growth as more blocks

have been awarded in recent years under the New Exploration Licensing policy for

intensifying exploration and production activities. The number of oil and gas

discoveries and production fields have also seen an increase in recent times as also

the number of companies operating in the sector. The refining activities have also been

growing at a steady pace and our nation is becoming a refinery hub in this part of the

world. Also increasing urbanization of many parts of the country, increase in

automobile usage, high growth in commercial vehicles have increased fuel outlets and

the transportation of the oil and gas has increased the total length of pipelines. In view

of the increased activities in exploration, refining, transportation of oil and gas, the

safety concerns has become a major and critical factor in the oil and gas industry.

Since oil and gas are highly inflammable, the impact of any accident can be very high

as such incidents will be felt not only on the accident site but also on the surroundings.

These accidents can cause loss of material, loss of lives and also damage to the

environment. Hence it is imperative that the oil and gas industry need to be very

vigilant and should not be lax to adopt stringent safety measures in handling these

products.

1.2 On October 29, 2009, a fire accident occurred in Indian Oil Corporation's

terminal at Sanganer in Jaipur during the transfer of kerosene and motor spirit to

another terminal. There was a blast which completely destroyed the facilities and

resulted in 9 tanks catching fire in immediate succession. Though fire tenders were

rushed but no action was initiated as a considered decision was taken by IOC,

management to allow fire to burn till such time the products get completely burnt out.

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The last tank fire extinguished itself after 11 days on 10.11.2009. The incident caused

death of 11 people, out of which 6 were company persons.

1.3 This Committee were concerned about the safety related aspects in the oil and

gas installations in the country as more safety related incidents continued even though

an inquiry committee headed by Shri M.B.Lal had given its report on the Jaipur

accident and recommended safety measures to be implemented in these oil

installations. Hence the Committee decided to examine the subject "Safety of Oil

Installations" in greater detail.

Legislative Framework

1.4 As per the Annual Report of the Ministry of Petroleum and Natural Gas, the work

allocated to Ministry are as under:

1. “Exploration for and exploitation of petroleum resources, including Natural Gas and Coal Bed Methane.

2. Production, supply, distribution, marketing and pricing of petroleum, including

Natural Gas, Coal Bed Methane and petroleum products.

3. Oil refineries including Lube Plants.

4. Additives for petroleum and petroleum products.

5. Lube blending and greases.

6. Planning, development, control and assistance to all industries dealt with by the Ministry.

7. All attached or subordinate offices or other organizations concerned with any of the subjects specified in the list.

8. Planning, development and regulation of oilfield services.

9. Public sector projects falling under the subjects included in this list. Engineers India Limited and IBP Company, together with its subsidiaries, except such projects as are specifically allotted to any other Ministry/Department.

10. The Oil Fields (Regulations and Development) Act, 1948 (53 of 1948).

11. The Oil and Natural Gas Commission Act, 1959 (43 of 1959).

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12. The Petroleum & Minerals Pipelines (Acquisition of Right of User Inland) Act , 1962 (50 of 1962).

13. The Esso (Acquisition of Undertakings in India) Act, 1974 (4 of 1974).

14. The Oil Industry (Development) Act, 1974 (47 of 1974).

15. The Burmah-Shell (Acquisition of Undertakings in India) Act, 1976 (2 of 1976).

16. The Caltex (Acquisition of Shares of Caltex Oil Refining (India) Limited and of the Undertakings in India of Caltex (India) Limited Act, 1977.

17. Administration of the Petroleum Act, 1934 (30 of 1934) and the rules made thereunder.

18. Administration of Balmer Lawrie Investments Limited and Balmer Lawrie and Company Limited.

19. Petroleum & Natural Gas Regulatory Board Act, 2006.

20. To promote long term engagement of Indian Oil Companies in the hydrocarbon sector abroad.

21. Strengthening energy security by acquiring oil and gas equity abroad and participation in transnational oil and gas pipeline projects.

22. Creation and administration of strategic petroleum reserve through Indian Strategic Petroleum Reserves Limited (ISPRL)”.

1.5 The Ministry of Petroleum and Natural Gas has enacted a number of legislations

over the years to deal with the safety aspects of oil and gas industry. When the

Committee wanted to know the legislations that has been enacted by the MOP&NG as

part of its mandate in regard to safety aspects of oil and gas industry, the Ministry in a

written note submitted the following:-

"The legislations enforced by MoP&NG are as under: For downstream Oil & Gas Companies:-

i. Petroleum Rules under Petroleum Act 1934. ii. Static and Mobile pressure vessel rule under Explosive Act 1884 iii. Gas Cylinder Rule under Explosive Act. iv. Manufacture storage and import of hazardous Chemical Rules

under Environment Act. v. Petroleum & Minerals Pipeline Act 1962 vi. Petroleum & Natural Gas Regulatory Act 2006

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For Upstream Oil & Gas Companies:- i. Petroleum & Natural Gas Rules 1959 under ORDA Act 1948 ii. Petroleum & Natural Gas (Safety in offshore operation) Rules 2008 under

ORDA Act 1948. iii. Oil Mines Regulations, 1984 under Oil Mines Act, 1952”

1.6 There are several agencies which are concerned with enforcement of the above

legislations for the oil and gas industry. On being asked about the details regarding the

agencies, the Ministry in a written note furnished the following reply:-

“The agencies that enforce the laws related to safety are: Petroleum & Explosives Safety Organization (PESO) Petroleum Rules under Petroleum Act 1934 Static and Mobile pressure vessel rule under Explosive Act. Gas Cylinder Rule under Explosive Act. Manufacture storage and import of hazardous Chemical Rules under

Environment Act.

DG, Factory Advice Service & Labour Institute / Chief Inspector of Factories of respective State Factories Rule under Factories Act, 1948 of Ministry of

Labour Manufacture Storage and Import of Hazardous Chemical Rules, 1989

under Environment ( Protection) Act, 1986.

State Labour Commissioner Contract Labour Act 1970

State Transport Commissioner Motor Vehicle Act & Rule

Central Electricity Authority Electricity Rule under Electricity Act 1910

Petroleum & Natural Gas Regulatory Board Petroleum & Natural Gas Regulatory Act 2006

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Director General of Mines Safety (DGMS) Petroleum & Natural Gas Rules 1959 under ORDA Act

1948 Oil Mines Act 1952”

1.7 On being pointed out that many of the legislations were very old and whether the

Ministry has proposal to revisit these legislations for its proper updating, the Ministry in

its written reply stated the following:

“Amendments are done from time to time depending upon the need. For example, amendment in respective Rules under Petroleum Act,1934 and ORDA Act,1948 were notified in 2011 and 2008 respectively”.

1.8 Commenting on the issue during the oral-evidence Secretary, MoPNG inter-alia

made the following comments:-

"We will definitely take your point into consideration. In fact, these rules and legislations are periodically visited. That is why, as you would have noticed, the OISD standards have been revised on the basis of a particular incidence. This is a continuous process and I agree with you. They should be done from time to time".

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CHAPTER – 2

SAFETY MECHANISMS IN OIL AND GAS INSTALLATIONS

2.1 There are 21 refineries, 11 Gas processing plants, 660 oil and LPG installations and more than 30,000 km cross-country pipelines spread across the length and breadth of the country. In Offshore Exploration & Production, there are 16 production complexes, 180 well platforms and 35 rigs. On-land, there are 323 production installations and 223 rigs. The installed refining capacity of the country is around 194 MMTPA; indigenous crude oil production is around 38 MMTPA while gas production is around 48 Billion m3 per annum. The marketing points including retail outlets, depots, and terminals are spread throughout the country for maintaining steady supply of petroleum products in the country. Hence, safety of oil & gas installations is of paramount importance.

2.2 Asked about the present safety level in the oil industry, the Ministry submitted the

following:-

"Oil industry maintains the highest level of safety standards. The safety measures include both proactive and secondary measures to combat any unsafe situation and are systemic in nature. Some of the major safety measures include incorporation of in-built safety aspects at the nascent stage, i.e., during the design phase itself. These include process safety, instrumentation & safety interlocks, safety while design of equipment, following the best international standards. The Industry has systems and procedures in the form of work permit system, operating manuals entailing start-up, shutdown, emergency handling procedures, disaster management plan etc.

Besides, each installation has its dedicated fire-fighting facilities which are equipped with modern equipment, trained crew to fight fire in case of any eventuality. Safety measures in oil industry are looked after by a dedicated group of personnel. Safety of vital plants, installations, employees and public at large is required to be given the highest priority.

By adopting both proactive and reactive measures in fire and safety, Oil Industry is equipped with measures to protect its vital installations. The industry also carries out Internal Safety Audits and conducts periodic mock drills, both on-site and off-site. It has also developed its own Disaster Management Plan and organizes mock drills both offsite & onsite to ensure emergency preparedness.

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The oil industry is continuously engaged in updating the standard operating procedures, training and retraining to narrow the knowledge gaps and strictly ensuring non-violation of systems and procedures. The renewed thrust has resulted in gradual decrease in number of fatalities over the years."

Role of Safety Council

2.3 When asked the safety mechanism for these installations, the Ministry stated as under:-

“The Government, vide Resolution dated 10th January, 1986, set up a Safety Council to ensure proper implementation of the various aspects of safety in the oil industry. The Safety Council, headed by Secretary of the Ministry of Petroleum & Natural Gas includes all Joint Secretaries and Advisors in the MOPNG, the Chief Executives Officers of all Public Sector Undertakings of the oil industry, the Chief Controller of Explosives, Advisor, Fire to the Govt. of India and the Director General of Factory Advice, Service and Labour Institutes as members. The major objective of the Safety Council is to lay down the procedures and guidelines in the matter of design, operations and maintenance as well as creation of new assets with a view to achieving the highest safety standards in a cost effective manner. The Safety Council is assisted by a technical body viz the Oil Industry Safety Directorate (OISD), which has expertise in the design of facilities, operations, maintenance, fire and safety aspects, industrial hygiene, etc.”

Oil Industry Safety Directorate(OISD)

2.4 OISD a technical directorate under the Ministry of Petroleum and Natural Gas

was formed in 1986 by a resolution of the Government with an objective to formulate

and standardize procedures and guidelines in the areas of design, operation and

maintenance as also the creation of new safety standards in a cost effective manner. It

also coordinated the implementation of a series of self regulatory measures aimed at

enhancing the safety in the oil and gas industry in India.

2.5 OISD is successfully looking after the safety in entire hydrocarbon chain in

upstream and downstream sector viz., Oil Exploration & production, Petroleum

Refining and Gas processing, Marketing & distribution and cross country pipelines.

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2.6 OISD is manned by a group of technical experts in the area of design,

operation, maintenance, inspection, safety, environment etc drawn from oil industry on

deputation.

2.7 To address the operational safety issues in Offshore Oil and Gas operations,

Petroleum and Natural Gas (Safety in Offshore operations) Rules, 2008 have been

formulated with emphasis on asset integrity and process safety. OISD is designated as

nodal agency for implementation of this Rules in Offshore operations with effect from

June’2008.

Jurisdiction of OISD

2.8 The activities of Public Sector Undertakings, Private Companies, Joint Ventures in the hydrocarbon industry covered by OISD as under:

“All Refinery & Gas processing Operations under PSU. All Exploration and Production Operation in Onshore and Offshore both PSU

and Private. All Cross Country Pipeline Operations and Crude oil under PSU. Marketing Operation for Storage and distribution of Petroleum products.

Processing of hydrocarbon for production of bulk petrochemicals in the large scale public sector”

2.9 OISD, over the years, has developed technical expertise in overseeing safety in the entire oil and gas sector. The core competence of OISD includes:

“ Laying down safety norms and development of technical safety standards

Carrying out Safety audits/inspection of entire industry and verify compliance to standards.

Carrying out pre-commission safety audit of petroleum refineries, cross country pipelines and marketing locations prior to commissioning of the facility.

Investigating major causes of fire and incidents to prevent recurrence.

Disseminating safety knowledge by organizing seminars, training, workshops and through a newsletter of OISD, at regular intervals”.

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2.10 Regarding safety standards developed by OISD, the Ministry informed the committee as under:-

“OISD has till date developed a total of 112 standards for implementation by oil companies. These standards enable oil industry to meet the requisite safety measures. Industry implements these safety standards on self-regulatory basis. OISD through various safety inspections checks the implementations of these safety standards and recommends measures for enhancing safety in the installations.”

2.11 When asked to furnish the sanctioned and actual manpower of OISD in each

category and the mode of recruitment of personnel for OISD, the Ministry gave the

following in written reply:-

"The manpower details are enumerated in the table below. OFFICERS: Technical Sanctioned Actual ED -Secretariat 3 2 Process & Engineering 13 10 Explorations & Production 28 6 Marketing Operation 4 3 Non- technical Administration 1 2 Finance 1 1 Executive Secretary 1 1 Total 51 25

NON OFFICERS: Sanctioned Actual

Clerical Staff 15 4 Total ( A + B)

66 29

The officers in OISD are positioned on deputation basis from PSU oil companies and are selected through a process of short listing and interview."

2.12 Asked to explain as to why only six people out of 28 sanctioned strength are

there in the Explorations and Production area and whether this limited workforce will

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affect the effective functioning of the OISD, the Secretary, MoPNG during the oral

evidence replied the following:

"We agree with you that they do not have the required strength. In case of the Explorations and Production, the only place from where they can get the manpower is either ONGC or Oil. These organisations have not been able to spare more people relating to their own safety installations for deputation to OISD. But as I had stated in the beginning, this is a cause for our concern also. We really intend to strengthen the organization. That is why we want to really create posts from where they can take people from outside or from the market. Out of 66 sanctioned staff strength, only 29 staff members are there. It is less than 50 per cent. So, this is an area of concern for us also".

2.13 Asked to elaborate further on the concerns about autonomous functioning of

OISD as it presently stands, the Secretary further added the following

"The degree of concern relates to two aspects. One is that they do not have the legal authority and secondly they do not have a cadre of their own. They have to draw from public sector undertakings because if we draw from the private sector, it could cause graver problem. So, it is safer to have it from the public sector on deputation. That is what, we are having. Once the Organization gets the legal authority, it will have its own cadre, have its own strength of technical people and then they would be even authorized to prosecute whosoever is not following".

2.14 When asked to explain on building own cadre as OISD draws its personnel

from the PSU sector on deputation, the Secretary, MoPNG inter-alia stated the

following during the oral evidence:-

"……….. we really want to strengthen OISD. We want to give it a statutory status but in the meantime, we received a proposal from the Department of Industrial Policy and Planning that they would like to entrust the tasks related to OISD from their own Organization called Petroleum Explosive and Safety Organization which is a statutory body. In fact, the legal authority for getting these OISD standards, it lies with PESO. The OISD is meant for prescribing standards and for offshore they have the authority also. But in case of other marketing and refinery, etc. PESO is the body which has the legal authority. So, DIPP has, in fact, conveyed to us that they would like to shut of this responsibility and give it OISD. So, we are in the process of examining that and we have conveyed our concurrence but really to transfer it to us along with staff and legal authority, it required a very detailed functioning. We have, in fact, engaged the services of a consultant and on that basis we would proceed ahead. The intention basically is to strengthen OISD".

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2.15 Asked to update on the strengthening and giving statutory powers to OISD, the

Ministry in its written reply stated the following:

“To enforce Safety in offshore – Exploration and Production activities, Government has already designated Oil Industry Safety Directorate (OISD) as the Competent Authority to exercise the power and functions as stipulated in the Petroleum and Natural Gas (Safety in Offshore Operations) Rules, 2008 which were notified in June’2008. As regards transfer of PESO job to OISD, the same is under consideration of Ministry”.

2.16 It has been noted that the Petroleum and Explosive Safety Organisation (PESO)

is under the administrative control of Department of Industry Policy and Production

(DIPP) which comes under the Ministry of Commerce. However, the role of PESO

includes administrating of 6 OISD Standards over the oil and gas industries. When

asked as to what is the role of PESO in implementation of safety aspects in the

petroleum sector, the Ministry stated the following:-

PESO is the competent authority to administer Petroleum Rules framed under Petroleum Act1934. Petroleum Rules, interalia, refers six OISD standards (No. 105, 116, 117, 118, 141 & 156). Thus implementation of safety aspects provided in these six OISD standards is monitored by Chief Controller of Explosives, PESO.

2.17 On the query that since PESO does not report to MoPNG, how does MoPNG

penalize the companies for violation of safety standards, the Ministry informed that

PESO takes punitive action on its own, if required based on OISD standards. On being

asked whether there is any move by MoP&NG to seek the activities of PESO

connected with safety of petroleum sector under OISD, the Ministry is its reply stated

the following:-

“PESO, under the Department of Industrial Policy & Promotion (DIPP) of the Ministry of Commerce & Industry at present is the statutory authority for implementation of Petroleum Act 1934 and the Rules thereof as well as Explosives Act 1884. DIPP hasproposed to transfer the PESO’s work relating to Petroleum Rules 2002 to a new statutory body/OISD under MOP&NG.

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Accordingly, OISD has prepared an approach paper on transfer of job from PESO to OISD.

In a review meeting chaired by Secretary, MoP&NG and attended by representatives of DIPP, PESO, OISD, it was decided that in order to arrive at a more informed decision on issues like requirement of manpower, legal aspects for empowering OISD with statutory authority, infrastructure etc. a detailed study of the extant system of both PESO & OISD is required to be carried out by engaging a consultant.The terms of reference of the consultant has since been prepared and are under finalization”.

Safety measures in private sector

2.18 When enquired as to whether OISD can enforce safety measures over private

Oil and gas installation, the Ministry stated the following in written reply:-

“OISD does not have statutory power to enforce safety measures over downstream private Oil and gas installations. Petroleum & Explosive Safety Organization (PESO) has such legal authority. OISD has the statutory power & authority for enacting safety in upstream offshore Oil & Gas installations.

In case of upstream onshore Oil & Gas installations, Director General of Mines Safety(DGMS) is entrusted with the legal authority”.

2.19 On a further query about the mechanism to monitor/assess the safety

measures installed by private companies, the Ministry gave the following reply:-

"OISD carries out safety audits for the private companies as well. The gaps in the system, if any, based on various OISD standards are identified by the audit team which are, in turn, discussed with the top management and a time bound plan for liquidation is emphasized. The companies prepare ATR and submit to OISD, which in turn, monitors the implementation process."

Safety Factors in new installations 2.20 When asked to submit a note on factors required to be considered from the

safety point of view when oil and gas companies set up their installation/plants/units, the

Ministry in a written reply stated as under:-

“The factors that are considered from the safety point of view, when oil and gas companies set up their installations are as under:

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Risk analysis and risk assessment study of the proposed installations to be set up.

Environment impact assessment of the proposed location to be set up. Conformity to the lay out design of the facilities that are being set up in the oil

and gas installations in accordance with OISD standards. During the nascent state of design of the oil installations/plants, various inbuilt

safety systems viz., process safety, instrumentation safety including instrument inter-locks, rigorous review of piping and instrumentation diagram, 3D model review of the plant/installation etc. are carried out.

Further, during the design stage itself for improved reliability of the various equipment besides the process safety aspects, international engineering standard like API, ASME codes are followed to enhance safety of the installations to be set up.

Guidelines towards in-built safety in design & other important aspects are also covered in various OISD standards viz. process design & operating philosophy; pressure relief & disposal system; design & safety recommendation for LPG mounded storage; hazardous area classification for electrical equipment; safety instrumentation for process systemetc.

The proposed firefighting facilities and infrastructure that are required to be installed are in accordance with the various OISD guidelines/Standards (OISD 116 & 117).

It may thus be seen that the safety considerations, while setting up installations/plants/units, follow a systemic approach beginning with risk analysis, process and engineering design considerations, inbuilt safety features as well as the relevant OISD guidelines/standards with respect to lay out of the plant and machinery, design, pressure relief, firefighting facility etc. All these considerations are aimed at enhancing the safety of the installations”.

2.21 Asked as to what studies/impact assessments does a company need to carry out

before the units/installations are set up ,the Ministry stated in their written reply as

under:-

"The impact assessment study needs to be carried out before the units/installations are set up in line with Environment (Protection) Rules notified by Ministry of Environment and Forests (MOE&F) and to be submitted to MOE&F for obtaining environmental clearance. The impact assessments includes information like use of natural resources, release of pollutants, risk analysis, environmental sensitivity and anticipated impacts and mitigation measures according to MOE&F’s guidelines.

MOE&F is the approving authority for giving environmental clearance after review on the impact assessments etc. OISD, on behalf of MOP&NG, in addition to verifying the safety measures to be taken by industry and its compliance, also scrutinizes the status of MOE&F clearance and compliance to the clearance

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conditions stipulated during OISD’s pre-commissioning audit prior to start up and operation of the facility for downstream units. With respect to E&P off-shore operations, OISD accords consent to operate after obtaining written confirmation from the company that environmental clearance and other statutory clearances have been obtained from the relevant authorities."

Safety Audits 2.22 Regarding the safety systems and guidelines that are in place in the oil and gas installation and the nature of supervision of agencies who enforce these guidelines. The Committee enquired as to what measures do the agencies take to ensure that the safety systems and guidelines have been adhered to by the oil industry. To this the Ministry furnished the following in a written reply:

“To achieve safety in vital oil & gas installations, regular audits are conducted to ensure that safety systems are in place and are in accordance with the guidelines. These audits are very effective tool to identify the areas of strengths & weaknesses and action plan to overcome the gaps. Internal audit of the oil installations

Oil companies at regular intervals carry out internal audit of its respective installations to identify the gaps in the safety system and action plan to liquidate such gaps. Audits are conducted in a planned manner based on check lists, field visits and in accordance with OISD guidelines and standards. These internal audits are carried out by multi-disciplinary cross functional team.

External Safety Audit and Surprise Safety Audit by OISD

OISD periodically alsoconducts External Safety Audit and Surprise Safety Audit of oil installations with a purpose to check whether in-built design safety systems, operational safety, instrumentation safety, plant health & integrity and fire-fighting facilities etc. are in accordance with the OISD guidelines. During the course of such audits, OISD team through site visits, interaction with operating personnel and checking of various documents highlights the areas of improvement.

During the Surprise Audit, OISD carries out similar exercise without informing the installation which is audited to check its preparedness and whether various safety systems are in accordance with the guidelines.

Further during the audits, OISD team also carries out mock drills to see the readiness of the plant personnel in mitigating any emergency situations that may take place in the installations due to fire or accidents.

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The External Safety Audit/Surprise Safety Audit recommendations are forwarded to CMDs of oil companies for time bound action on the same. The oil companies in turn prepare time bound action plan and submit the Action Taken Report (ATR) to OISD on quarterly basis. The pending External Safety Audit/Surprise Safety Audit recommendations are also reviewed by the top management of respective oil companies who in turn advise and facilitates quick disposal of the pending recommendations.

Pre- Commissioning Safety Audit by OISD

Pre- commissioning Safety Audit is carried out by OISD for all new installations and for additional facilities at the existing location in downstream Oil and Gas Installation of Oil PSUs for checking compliance of the norms prescribed by OISD and other statutory requirements.

Safety Council

To ensure proper implementation of various aspects of safety in oil and gas industry, OISD is headed by the Safety Council, and Secretary P&NG is the Chairman of the Safety Council.

The major objective of the Safety Council is to lay down the procedures and guidelines in the matter of design, operations and maintenance as well as creation of new assets with a view to achieving the highest safety standard in a cost effective manner.

Safety Council is assisted by Executive Director, OISD who is also the member secretary of Safety council”.

2.23 When asked the frequency of safety audits and how does it conduct them, the

Ministry provided the following in its written reply:-

External safety Audit These audits are conducted by OISD with members from other Oil companies

other than the audited company. The period of audit varies from 3 to 5 days and the frequency of audits is:

i. For Refineries & Gas Processing Plants: Once in 3 years ii. For Marketing installations: Two audits at a gap of 5 years initially and

thereafter either a request audit or surprise inspection. External safety audit is carried out as per check list developed by OISD which broadly includes the following checks:

i. Functioning of Safety Management, Safety Committee & Safety trainings ii. Emergency Management system iii. Internal Safety audit findings & its liquidation status iv. Layout & facilities of the installation v. Operational activities

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vi. Maintenance & Inspection systems vii. Electrical & Instrumentation systems viii. Compliance of Statutory Licenses & it’s documentations ix. Review of status of implementation of Recommendations of earlier external

safety audit/risk analysis recommendations/companies’ internal safety audits /other statutory inspections.

x. Site visit of operational areas such as Process plant, Thermal Power house, Tank farm area, Pump House, Loading gantries (TT &TW), Electrical system, Fire protection system, Security system in the location etc.

During the audit, mock drills are also carried out to check the healthiness and preparedness of fire-fighting infrastructure including the knowledge of employees on handling such emergency scenarios.

Surprise Safety Audit The surprise safety audits of Refineries and major gas processing units are carried out by technical experts not below the rank of General Managers deputed from Industry. In case of Marketing installations, the surprise audits are carried out by Officers from OISD based on site visit and review of implementation of earlier external safety audits/internal audits recommendations. Compliance report The oil companies are required to submit the compliance reports on the recommendations made in the above audits/inspections on quarterly basis to OISD. The compliance status is reviewed by the respective companies at senior management level. The pending issues of ESA/SSA are also reviewed at the Board level and by the Safety Council. Pre-Commissioning Audit: Since 1994 all the Oil and Gas Installation of Oil PSUs are required to offer their

facilities for checking the compliance of the norms prescribed by OISD and other statutory requirements. Pre-commissioning audit is carried by OISD based on request from OMCs which broadly includes the following checks:

i. Layout & safe distances in conformity with OISD STD-118 & other statutory

requirements. ii. Firefighting facilities in conformity with OISD STD-117 including fire alarm and

communication facilities. iii. Compliance to various statutory approvals. iv. Risk analysis and implementations of corrective measures.

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v. Operating manuals, emergency handling procedures & preparedness for emergency handling etc.

vi. Development of standard operating practice. vii. Training of employees. viii. The MB Lal committee recommendations and provisions of OISD standard 116

& 117”. 2.24 In an information furnished to the Committee the Ministry had given the following details regarding the audit conducted by OISD.

“During the last 5 years, OISD has carried out the following number of audits:

Area 2007-08 2008-09 2009-10 2010-11 2011-12 Total

Refinery & Gas Processing plants Nos.) 15 23 27 28 31 124

Marketing (Nos.) 23 27 20 33 48 151

Exploration & Production (Nos.) 66 68 77 76 71 358

TOTAL (Nos.) 104 118 124 137 150 633

Pipeline-kms 3,129 3,216 3,082 3,100 4,798 17,325

Stoppage due to safety consideration

2.25 When asked to give details of instances of stoppage/suspension of operation of

the oil and gas installation due to safety considerations during the last 5 years, the

Ministry in their written reply stated as under:-

"OMCs have stopped/suspended operations of its installations due to the following safety considerations: Not meeting inter-distance safety norms as per the standard, Severe congestion within & outside the installations, Unsafe railway sidings leading to suspension of dispatch thru rail, No scope for complying with the safety norms due to space constraint etc. During the last 5 year, 30 POL and 02 LPG installations of OMCs have been closed due to factors mentioned above. The details are as under:

IOCL 13 POL and 2 Gas installations,

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BPCL 2 POL installations, HPCL 15 POL installations."

The Company wise details of installations stopped/suspended of operations during the last five years

Category IOCL HPCL BPCL POL 1. Kathgodam

2. Ratlam Depot 3. Guwahati 4.Biswanath Charali 5. Pathankot 6. Kannur 7. Behrampur 8. Jaypore 9. Shakurbasti 10. Srinagar 11. Barapani 12.Talchar 13. Hanumangarh 14.Sanganer, Jaipur (Damaged in devastating fire)

1. Jagdalpur 2. Barielly 3. Kota (black oil) 4. Rajkot 5. Udaipur 6. Vapi 7. Ambala 8. Madurai Old 9. Erode 10. Salem 11. Vasco (MS/HSD) 12. Ratlam 13. Nishatpura 14. Satna

1. Katihar Depot 2. Bakania Depot

LPG 1. SawaiMadhopur BP 2. Bangalore BP

--- ---

Safety Standards for Natural Disaster Prone installation 2.26 On being asked whether the oil and gas installation can handle natural disaster

like tsunamis and earthquake and whether these safety standards are reviewed after

certain revisions in conditions like change in seismic zone etc. So the Committee

enquired as to whether any study has been conducted to review aspects of safety in

the existing oil and gas installations whenever revision of Seismic zones in the country

take place and If so to give details of the recommendations and measures taken during

the last such revision, the Ministry have the following in its a written reply:-

"Specific study towards this has not been conducted to review safety aspects in the existing oil and gas installations due to revision of seismic zones in the country. However, at the design stage itself, if the installation lies on the earth’s

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fault zone then appropriate safety factors are considered to take care of any future eventuality."

2.27 Regarding the coastal oil and gas installations in the country subjected to

review of safety measures and to give details of measures to be taken, to which the

Ministry replied the following in a written note:-

"Review of safety measures of all the oil installations in the country including the installations in coastal area is carried out regularly by OISD. All the recommendations of such reviews are monitored on quarterly basis."

Details of safety measures to be taken and progress made. Coastal Refineries

The safety review of the coastal refineries (External Safety Audits) are carried out once in three years like other PSU refineries in the country. The progress of implementation of safety recommendations made in consecutive two audits is as under :

A. Major Safety measures already implemented by Industry

1) HPCL Mumbai and Vizag Refineries:Installed LPG mounded bullets by decommissioning the Horton Spheres storage , 2) BPCL Mumbai Refinery:Relocated the fire station control room to safe area, The operation of POL loading gantry inside the BPCL Refinery premises has been stopped to enhance safety of the location,

Coastal Refineries

Safety review Year Recommendations (nos.)

Year Recommendations (nos.)

Year Recommendations (nos.)

Total Implemented In

progress Total Implemented In

progress Total Implemented In

progress HPCL-MR April,

2006 86 85 01 Feb,

2010 72 60 12 - - -

HPCL-VR Dec, 2005 62 60 2 May, 2009

64 57 7 - - -

BPCL-MR Feb, 2005 38 36 2 April 2008

35 33 2 Feb 2012

- -

BPCL KR April , 2002

50 50 - March, 2006

74 72 2 Jan 2010

170 111 59

CPCL Manali Oct, 2002 85 85 - April 2007

65 60 5 June 2010

78 64 14

CPCL CBR 2000 - - - Aug, 2004

70 70 0 Oct, 2007

62 62 -

Hadia Refinery

Feb, 2003 34 34 - Feb 2007

43 42 1 March 2010

74 64 10

MRPL June 2005(1st

ESA)

97 91 6 Feb 2009 (2nd ESA)

129 116 13 - - -

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3) BPCL-Kochi Refinery: All the maintenance & Inspection recommendations for improvement of health of Off-site piping have been liquidated. 4) IOCL Haldia Refinery:The safety valve discharge from Crude column is connected to flare , hydrocarbon detectors provided near LPG and Naphtha Pumps and the LPG Pumps were provided with double mechanical seals, 5) CPCL Manali:The close blow-down system is implemented, 6) CPCL CBR : The LPG TTL gantry provided with water sprinkler to cover dish ends to TTL. 7) MRPL: the off gases from VDU has been relocated to safe location, Installed hydrocarbon detectors at the FD suctions of all the furnaces. The smoke detector alarm system for central control room has been renewed& made workable. 8) ONGC Tatipaka : The old condensate tanks which were in close proximity of control room are being emptied out to remove the oily sludge. 9) ONGC Uran: Hydrocarbon detectors installed at Slug catcher & Flare Knock out area. 10) To minimize the human error industry strengthened the work permit system, training for employees & contractors and carried out updations of operating manuals/ SOPs. B. Safety measures implementation is in progress as given below 1) HPCL Mumbai Refinery: Automatic Shutdown valve at Naphtha stabilizer Column bottom provided in one unit , the provision of same in the another unit is in progress. Similarly job is in progress for connection of safety valve discharge of the Propane compressor to Flare and both of them require shut down of the units and are planned to be carried out during Turn around maintenance of the unit this year. 2) HPCL-Vizag Refinery:Safety valve discharge connection to flare for CDU is partly completed and balance is planned to be completed during planned shut-down of the unit . 3) BPCL: Job for firefighting of over head Air-fin coolers is in progress. 4) BPCL-Kochi: LPG pump is being provided with double mechanical seal. The electrical instrumentation cables passing above the hot pumps/hot lines are being rerouted / provided with adequate fire protection. 5) IOCL, Haldia Refinery:Job to provide common isolation valve at CDU is in progress & planned to be executed during turnaround. 6) CPCL –Manali :The Safety valve discharge from CDU/VDU is planned to be hooked up to flare during shutdown planned this year.

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7) ONGC-Uran: Internal inspection of two crude oil tanks planned & action taken for modification of Effluent treatment plant. 8) MRPL: Job for connecting the Horton sphere safety valve discharge is taken up along with New Unit under capacity augmentation this year. Implementations of safety measures at Coastal location of cross country pipelines stations:-

Implementation of recommendations made in consecutive two audits is as under

Coastal Location

Date of Audit

Compliance status No. of

recommendations Recommendations

Complied Vadinar 10.09.2004

(ESA) 14 14

Paradip 5.2.2008 (pre-com)

25 25

Haldia 1.2.2002 (ESA)

24 24

Mundra 20.7.2005 (Pre-com)

28 28

2.28 Asked as to whether there is any laid down disaster management plan to

minimize losses in case of natural disasters/accidents at the installation. The Ministry

in their reply stated that the disaster management plans for natural disasters/accidents

at the installations are already included in the Disaster Preparedness Manual of the

concerned units.

2.29 When asked about the organisational set up of Safety, Health and

Environment (HSE) in oil and gas companies, the Ministry stated as follows in their

written reply:-

"All Oil & Gas Companies have their own Safety, Health and Environment policy. Corporate Safety Departments’ functions include policy formulation, monitoring of safety management system, auditing, accident investigation, review and reporting to top management, OISD, MoP&NG and various statutory authorities."

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Accident/Incident Investigation findings

2.30 Regarding the details of accidents at installation during the last 5 years, the

Ministry informed as under:-

OIL INDUSTRY INCIDENT STATISTICS in LAST 5 YEARS

Table 1: Total Consolidated Types of

Incidents at Installations

2006-07 2007-08 2008-09 2009-10 2010-11

FIRES Accidents

20 42

19 61

17 68

23 74

14 70

Total

62 80 85 97 84

Table 2 : Group wise total fire Incident

Group 2006-07 2007-08 2008-09 2009-10 2010-11

Refineries & Gas Processing Plants

6 8 0 4 3

Exploration / Production (Onshore)

8 6 9 7 1

Exploration / Production (Offshore)

1 1 3 1 1

Marketing Terminals/ LPG Plants/ Depots

2 3 2 5 5

Cross Country Pipelines

3 1 3 6 4

TOTAL 20 19 17 23 14

Table 3 : Group wise total accidents

Group 2006-07 2007-08 2008-09 2009-10 2010-11

Refineries & Gas Processing Plants 8 15 12 18 5

Exploration / Production (Onshore)

13 22 23 18 26

Exploration / Production (Offshore)

9 16 23 21 23

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Marketing Terminals/ LPG Plants/ Depots

4 5 5 11 6

Cross Country Pipelines

8 3 5 6 10

TOTAL (at Installations)

42 61 68 74 70

2.31 On being asked as to how are ‘accidents’ defined in the oil and gas industry

and details regarding the accidents occurred in the oil and gas installations during the

last 5 years,the Ministry stated the following:-

"OISD Manual use the term “incidents” to describe various fire and accidents that occur in the oil installations. Incidents defined in oil and gas industry are as follows: Major Incident

i. Fatality ii. Permanent Loss of Body Part iii. Permanent Disability iv. Loss of Property >Rs. 5 lacs v. Shut down of Plant / Facility vi. Blow out / Explosion vii. Loss of more than 500 man-hours viii. Fire of more than 15 minutes duration ix. Failure of Rig Critical Equipment like draw works, casing line etc.

Minor Incident Any incident not falling under any of the categories of major incident. Near miss Incident

i. An incident which does not result in any injury or damage to property but has the potential to result in injury and / or property damage.

ii. An undesirable event, if not timely controlled, would have led to a major / minor incident.

The following events are to be categorized under major or minor incident, as applicable: Hydrocarbon leakage from pipeline, resulting in stoppage of operations Collision between vessel and offshore installation/ rig. Release of toxic gases."

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2.32 When asked as to when are accidents declared as major, the OISD, ED during

the oral evidence stated as under:-

"Sir, the OISD standard says that the major fire is where there is a loss of more than Rs.5 lakh or if the unit is shut down. So, mostly if the unit is shut down, we declare it as major fire even if there is some fire in the supply line without which you cannot run the unit".

2.33 When asked whether the companies are obliged to report such

accidents/incidents to statutory authorities, it was stated that Companies are obliged to

report major incidents to PESO and Chief Inspector of Factories as per the MSIHC

Rule and all the major accidents / incidents are also reported to OISD.

2.34 On being asked about the causes for these fire accidents , the Ministry replied

that most of the accidents took place due to human error, like violation of work permit

system as laid down in OISD standard-105and non-adherence to the Standard

Operating Procedures.

2.35 On the financial impact of such fires and incidents in various oil installations. The ministry furnished the following information :-

Financial Impact due to Fire Incidents Consolidated Summary Rs.in Crore

Sl. No. Group 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 TOTAL 1 Refineries &

Gas Processing Plants

20.48 36.04 0.00 46.90 1.89 10.70 116.01

2 Exploration / Production (Onshore)

0.15 0.10 0.14 0.05 nil 1.31 1.75

3 Exploration / Production (Offshore) #

nil nil 0.30 nil 0.50 1.00 1.80

4 Marketing Terminals/ LPG Plants/ Depots

0.00 0.25 3.72 247.20 31.60 0.00 282.77

5 Cross Country Pipelines ##

0.28 0.15 0.27 49.24 0.16 1.06 51.16

TOTAL 20.91 36.54 4.43 343.39 34.15 14.07 453.49

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TRAINING

2.36 High standard of safety can be achieved in an organisation if employees at all

level are made to get involved in the safety programme of the organisations. Most

accidents involved unsafe conditions and unsafe acts which are results of human

failure. One method of preventing this unsafe condition and unsafe acts is to train

persons to establish and maintain a safe working environment.

2.37 In handling safety related incidents, training of people plays an important role.

When the Committee asked the Ministry to furnish a note on the training given to the

operating personnel/supervisors of the oil and gas installations, the Ministry give the

following in their written reply:-

2.38 Each of the oil company has its own training calendar. The training needs of the

employees are identified and based on the need requisite in-house and off the

company trainings are imparted. Training to the employees consists of both class room

inputs as well as on the job training. In other words, through faculty interaction requisite

theoretical inputs are provided and at site on-the-hand training is provided to gain

practical approach.

The training programs basically cover the following: Understanding the process. Understanding the PFD and P&I diagrams. Inputs on start up, shut down, emergency handling procedures. Training programs on HAZOP & QRA for officers. Site specific programs on SOPs. Inputs to improve the reliability of equipment. Inputs on firefighting facilities & emergency handling. Live firefighting training at fire training grounds. Appreciation program on fire & safety for all employees. Awareness program on fire & safety at the induction level. Refreshers program on fire & safety.

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2.39 Besides, regular training inputs are also provided to various contract labour

employees working in the installation so as to equip them with adequate knowledge

and skill not only to fight emergency situations like fires but also various do’s and

don’ts of fire and safety. The Safety training to contract workers, TT crew, security

personnel are given in line with OISD-standard-154.

2.40 Induction level trainings are provided to all the contract workers prior to

providing them gate pass for working in the installation.

2.41 Asked whether Safety Drills are conducted by companies at their installations

and to give details of the frequency of such drills conducted, the Ministry stated the

following:-

"Safety drills are regularly conducted by companies at their installations. The Onsite emergency drills are conducted at the interval of 6 months and offsite emergency drill is conducted once in a calendar year in line with provisions of Manufacturing, Storage and Import of Hazardous Chemicals (Amendment) Rules, 2000."

OIL SPILL

2.42 When a question was posed by the Committee on offshore oil spill and its

consequences the CMD, ONGC, replied as under during the oral evidence:-

"Sir, as regards the offshore, I can tell you that we have a dispersion model based on a Norwegian software company. It can indicate at any time in the year depending upon which installation oil spill is taking place, how much time it will take for us to tackle it and which place it will land in. So, it is very much available. I am not aware whether it is prescribed there or not but this is very much prevalent not only with ONGC but even with joint ventures which are operating in the western offshore. It is very much available".

2.43 When asked as to whether such software are available in the private sector

also as they are now given oil blocks ,the Secretary, MoPNG stated that it is mandated

by law and this requires a clearance from the Ministry of Environment and Forest. This

impact assessment has to be submitted to them.

2.44 On being asked as whether the GIS Mapping of consequences is part of

environmental clearance, the Secretary during the oral evidence stated as under:-

33

"It applies more on off-shore installations because on on-shore the consequences are different. In off-shore definitely they have all the details with them".

2.45 When asked as to whether Indian companies have capabilities to manage oil

spill and its consequences impacting the environment, the CMD ONGC stated as

under during oral evidence:-

"Sir, I am not sure if it is mandated by law. But what we are trying to say is that any software which is making this prediction will look into all these, the weather, the current, the waves and the tide and will come to conclusions whether it is internal or external, irrespective of that fact, the model will always predict where these spills are going to take place and in how much time. Mostly what happens in case of oil spills is that oil gets evaporated before it reaches the shore. If the time is there it can always be collected, dispersed and disintegrated. So, there is hardly any chance of this going and creating a catastrophe in case it is of a smaller volume".

2.46 Elaborating further on the subject, the CMD, ONGC stated the following:-

'The entire oil spill has been broken into three tiers. If it is up to 700 tonnes, it called tier I, and all the operators, like the ONGC or the other operators in the offshore have been given the responsibility of having the facilities. So, we have for both the Eastern and the Western off shores to contain if the oil spill is about 700 tonnes. If it is more than 700 tonnes, then it called the tier II and the Indian Coast Guard has been mandated to have this responsibility of containing this. Beyond that it is called tier III and there are world renowned companies, they are invariably called. Nobody maintains it. No country probably maintains this kind of tier III facilities. These are specialised companies who have got the total wherewithal. They have got their own aircraft etc. and all that we need to have is a membership of that. They can mobilise within hours and then we have to pay for the oil spill control".

2.47 When asked as to explain the domain expertise of the Coast Guard in oil spill,

the ED, OISD replied the following during the oral evidence:-

"There is a common pool and in the common pool the fund is given and Coast Guard takes the necessary equipment whatever is required and it is the Coast Guard who does it".

2.48 In a Note on the preparedness of oil PSUs to deal with oil industry problem like

oil spill in offshore locations and other contaminations in onshore installation. The

Ministry furnished the following:

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"OFFSHORE Installations:

The offshore oil installations have implemented the Oil Spill Response Plan to deal with Tier-I level oil spill (up to 700 MT of oil spill). Regular mock drills are carried out to check the efficacy of the Oil Spill Response system.

Indian Coast Guard has the facility to deal with oil spill more than 700 MT and up to 10000 MT (Tier-II level). Tier-III relates to spill over 10000 MT and would involve national and international support.

National Oil Spill Disaster Contingency Plan (NOS-DCP) exists in the country to preserve and protect the marine environment and prevent & control marine pollution. The functional responsibilities of various Ministries and Departments for oil spill response in maritime zones have been defined in the NOS-DCP. DG (Coast Guard) is designated as the Central Coordinating Agency (CCA) to implement the plan and coordinate resource pool up in the event of an oil spill. Individual oil companies are also the stakeholders in the plan, which will provide assistance to the Coast Guard.

Indian Coast Guard has four regional oil spill response centers at Port Blair, Mumbai, Chennai & Gulf of Kutch (Gujarat).

Indian Coast Guard periodically reviews the NOS-DCP provisions with the industry, Port authorities, central and state pollution control boards, National Institute of Oceanography etc.

The Contingency Plan prepared by the operator for handling oil spill emergencies is vetted by Coast Guard.

In order to further enhance the capabilities for oil spill response it has been discussed and decided to pool the resources available with the companies. Accordingly, mutual aid arrangement for ‘Pooling of Resources’ amongst all the companies located in near vicinity has been prepared as given below:

a) Western Coast- 1. Vadinar IOCL, RIL, Essar and BORL

2. Hazira Cairn India &Niko

3. Mumbai High ONGC & BG

4. Kochi BPCL & Kochi Port

b) Eastern Coast – 5. Puducherry Hardy & HOEC

6. KG Basin/ Yanam Cairn, RIL, GSPC & ONGC

7. Vizag HPCL &Vizag Port

8. Paradip IOCL &Paradip Port

MOU for Pooling of Resources is finalized except at Mumbai High area, where ONGC & BG are in the process of finalizing the same and at Puducherry area, where the MOU would be finalized as soon as production at Hardy platform is resumed.

35

Major oil companies like ONGC have taken membership with M/s OSRL, Singapore to deal with any major oil spill.

ON SHORE Installation:

For Onshore installations where storage facilities are there have been provided with containment system in the form of tank dyke. The volume of tank dyke is designed in such a way that it can contain 110% of the tank volume. Floor of the dyke are preferable made with cement concrete to prevent ingress of oil to the soil. Dyke valves are always kept in close position to prevent oil spill from the dyke to the other areas. Thus, oil spill at onshore installation are remote possibility. "

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CHAPTER – 3

MB LAL COMMITTEE RECOMMENDATIONS 3.1 Jaipur Fire Accident took place on 29.10.2009 at Indian Oil Corporation Terminal. The Ministry ordered an independent enquiry committee under the chairmanship of Shri M.B. Lal to investigate into the causes of fire and to suggest remedial measures to prevent recurrence of such incidents in future. The Committee had given 113 recommendations in January, 2010 for implementation at existing locations of oil marketing companies. MoP&NG on 21.04.2010 conveyed acceptance of the recommendations of the MB Lal Committee and a specific timeframe was decided for implementation, after discussions with the OMCs.

The time frame for implementation of recommendations of MB Lal Committee is given in Annexure - I

The MB Lal Committee in their report inter alia observed that:-

“The immediate cause of the accident was the non-observance of normal safe procedure involving sequence of valve operation in the line up activity and an engineering design which permitted use of a “Hammer Blind Valve”, a device which is used for positively isolating a pipeline. The design of the Hammer Blind valve allows a large area at the top of the valve (at the valve bonnet) to be completely open every time the valve position needed to be changed. It was through this open area that the liquid MS had gushed out, when the tank was being lined up (made ready for pumping to BPCL) because another valve connecting to the tank was also open when the Hammer Blind was in the changeover position.

The basic or root causes were an absence of site specific written operating procedures, absence of leak stopping devices from a remote location (the facility for remote closing of the “Motor Operated Valve” connecting to the tank side, which could have stopped the leak and insufficient understanding of hazards and risks and consequences.”

The M.B.Lal Committee had also observed that due to non-availability of self

contained breathing apparatus (SCBA) at the accident site and absence of any training

to deal with such emergency ,the personal could do little and had to withdraw.

3.2 The salient recommendations of the M.B.Lal Committee include:

a. Adherence to Standard Operating Practices (SOP)/management of change procedure

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b. Improvement in design and layout for preventing loss of hydrocarbon containment along with terminal automation for new installations.

c. Development of new standard by OISD covering all aspects at one place i.e. design, operations and maintenance.

d. Strengthening of training and inclusion of Safety orientation as one of the performance evaluation criteria.

e. The quantitative risk analysis to identify the hazards and accordingly mitigations measures to be strengthened.

f. Strengthening of fire-fighting facilities g. Strengthening of safety function h. Strengthening of internal safety audit mechanism i. Review of existing statutory provisions w.r.t. sitting criteria for major

installations The Petroleum Rules and various provisions under The Environment Act with a view to create buffer safety zones around high-hazard petroleum installations.

3.3 When the Committee wanted to know the status of implementation of the recommendations made by the MB Lal Committee, the Ministry replied the following in its written note:-

“Implementation of recommendations is at various stages and is being regularly monitored by a Joint Implementation Committee constituted by the MoP&NG. The last meeting of JIC was held on 05.03.2012 and the present status of implementation of M B Lal Committee’s recommendations in respect of oil companies is as follows:

Total Number of recommendations: 113

S No. Recommendation Number Percentage

A Recommendations implemented 66 58%

B Recommendations under implementation

47 42%

(i) Engineering related 11 10%

(ii) Procurement related 10 9%

(iii) Training Related 03 3%

(iv) General/ Policy related 13 11%

(v) OISD Related** 10 9%

(** indicate additional safety measures that are to be incorporated in a separate standard. Towards this, OISD std-244 is under development & will be put upto Safety Council for approval in FY 2013).

38

56 % recommendations of the MB Lal Committee have been implemented and these address the vital issues for enhancing safety in oil installations like focus on training, strict adherence to Shortest Possible Procedures (SOPs), improving LUX level in the installations, operation of first tank body valve from both control room and field, from outside dyke area etc”.

Assuring the implementation of the recommendations, the Secretary

during oral evidence on 29.8.2011 stated:-

“Hon. Chairman, since the time this issue was raised by the hon. Committee, we had convened certain meetings with all the concerned and have taken decisions. Those decisions will stand. We are committed to implement the M.B. Lal Committee recommendations. We are moving ahead in that direction. In fact, I had read out in one of the meetings that we have given them a timeline, a chart. By that time, they will have to comply; they will have to put whatever is required in place to make the installation safe. And there is no rethinking at our level. We are, in fact, pressing them continuously to move ahead and finalise the tenders, invite bids open bids, compare, place orders, and move ahead in the given time frame. There is no rethinking and no review in our minds at our level. It has to be done and that too, within a time frame. We have laid down a mechanism at the Ministry level. Additional Secretary himself convenes the meetings periodically to monitor the progress. The last meeting was convened in August. I believe that the next meeting is again going to be convened and we are really going to see that each and every milestone is achieved. I can only express my concern because hon. Committee Members have raised certain issues which may not have come to our notice. Definitely, we would ourselves like to confront this to the Oil Marketing Companies. This is the position. Some slippages might be taking place. They have to bring it to our notice. Otherwise, they would not be able to adhere to the timeline. I can from my side say and say with confidence that they have to comply with it. They have to put all the safety equipments etc. in position as per the timelines given to them. They keep assuring us that all the actions required for the safety equipments to be brought in are in line and somehow they are also feeling confident that it will all be done within the given time frame. But, definitely looking to the concern which hon. Members have expressed, we would like to take it from them also so that there is no slippage, there is no carelessness at any level. This much assurance I can give to the Committee”’

Regarding representations received to review some recommendations of

the M.B. Lal Committee, including circulation of unsigned note from Shri M.B.

Lal himself the Secretary informed that representations have been received

39

from some members, CVC and Shri M.B. Lal himself which were placed before

the steering committee and thereafter to chairmen committee. On being asked

that since the Ministry is moving in direction of implementation of M.B. Lal

Committee report, the reasons for appointing another Committee the Secretary

stated that it is a continuous process which keeps happening.

On being pointedly asked if there is any dilution of standards the

Secretary stated there is no aim to dilute. CMD, IOC however stated (in a sitting

on 29.3.2012) that if any standards have been made one or two years earlier

and if there is a better technology now they would like to make changes. It was

agreed that since the new technology is ongoing process it should not be a

reason not to implement the OISD standards.

When asked on the action taken on OMCs which are delaying the

process the Secretary stated that with the time schedule given by M.B. Lal

Committee report, in some cases it can happen that work is not completed in

stipulated time as it can take more time. However there is no dilution in

implementing OISD standards.

3.4 OISD had revised two Standards namely OISD-STD-116 and OISD-STD-117 in

November, 2010. These Standards basically relate to fire protection Standards as per

the details given below.

“OISD-STD-116 – Fire protection facilities for petroleum refinery & oil/gas processing plants)

OISD STD-117 - Fire protection facilities for petroleum depots, terminals, pipelines installations and lube oil installations”

3.5 When asked by the Committee how the OISD Standards are developed, the

Ministry stated the following:

“All OISD standards are developed through a well-established approval process; the standards specifying only the minimum requirements are to be met. A company is at liberty to install facilities over and above those specified in the OISD standards.

40

OISD Std.-116 (Fire protection facilities for petroleum refinery & oil/gas processing plants) & OISD Std.-117 (Fire protection facilities for petroleum depots, terminals, pipelines installations and lube oil installations) are statutory standards. These two standards were developed through a consultative process viz. wide consultation with industry members, incorporating recommendations of MB Lal committee and recommendations by the Chairman Committee constituted by the Safety Council. These standards, upon approval by the Safety Council, were notified for implementation in Nov, 2010”.

3.6 It is seen that M.B. Lal Committee set up after Jaipur Fire Accident in 2009

made 113 recommendations which the Ministry has accepted. When the Committee

enquired as to whether it does not indicate that there were gaps in the safety

preparedness need for improvement of safety systems, revision of standards etc. of

the oil and gas Installations, the Ministry in its reply furnished the following:-

“Fire at IOCL’s Jaipur terminal occurred primarily due to human error. The operation involving reversal of the hammer blind with MOV kept in open position resulted in huge spillage of POL. This led to formation of vapour cloud and subsequently fire of such a magnitude. It may be mentioned that although fire-fighting equipment were in place but were of little help once hydrocarbon fire of such magnitude engulfed the area. Routine operations involving transferring of POL had been carried out by the plant personnel umpteen numbers of times in the past without any accident. To this extent, there were gaps in safety preparedness. Knowledge gap is an issue and the OMCs have accorded extra thrust to equip their employees, including contract labourers with adequate skill & knowledge.

It is submitted that OISD standard 116 & 117 were in the process of revision as per normal practice prior to the Jaipur incident. The Jaipur fire incident led to the constitution of the MB Lal committee. The MB Lal Committee recommended certain safety measures. Recommendations were also made by a Committee of Chairmen of PSU oil companies. Since OISD standards were in the process of revision, the recommendations of both the committees were included in the revised standard”.

3.7 The Committee wanted to know as to how the decisions related to safety are

decided in the Ministry and related agencies. So the Committee sought from the

Ministry as to which is the highest forum to decide on safety issues for oil and gas

installations. The Ministry in its written replies furnished the following:-

“Safety aspects technically and operationally are looked after by concerned Unit head and Oil Companies CEOs. Besides, there is a Safety Council which is headed by Secretary, Ministry of Petroleum & Natural Gas as Chairman and

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includes members comprising Additional Secretary, Joint Secretaries of MoP&NG, Chief Executives of Public Sector Undertakings, at least two Chief Executives from Private / JV Companies on rotational basis, Advisor Fire to the Government of India, Director General of Factory Advice Service and Labour Institute and Chief Controller of Explosives”.

3.8 When asked by the Committee, about the estimated expenditure to be incurred

to implement the MB Lal Committee recommendations by oil PSUs and private

companies, the Ministry furnished the following in its written reply:-

“Since the procurement process is still on, it is difficult to arrive at a figure on the proposed expenditure that may be incurred on implementation of all the recommendations of the MB Lal Committee. However, it has been roughly estimated by OISD that the expenditure would be about six to seven thousand crore rupees. A firm figure will emerge once the financial bids of all the tenders are opened”.

3.9 Asked subsequently by the Committee to spell out the time frame by which the

Ministry and PSUs will implement the recommendations of M.B.Lal Committee, the

Ministry gave the following information:-

“As per the information received from OISD, there are 113 recommendations

given by M.B. Lal Committee post Jaipur fire in 2010 that are to be implemented by the oil industry. Out of this, 66 recommendations have since been implemented and 47 recommendations are at various stages of implementation.

As per inputs provided by the oil companies and OISD based on the progress achieved so far, the time frame for major engineering & procurement related recommendations are as follows:

Sl. No.

Items Tentative Time Schedule

1 High Volume Long Range Foam cum water monitors.

Partly Implemented. Balance : December,2014

2 Rim seal fire detection &suppression system.

December,2014

3 Hydrocarbon detection system.

December,2013

4 Up gradation of fire water system to meet double fire contingencies in installation having aggregate storage capacity of more than 30,000 kl.

December,2014

5 Replacement of Hammer blind valves. Award of contract by May,2012.

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6 Provision of Medium expansion foam

generator (MEFG).

January,2013

7 Remote operated shut off Valve (ROSOV).

Award of contract June,2012

8 Close Circuit TVs 73 % completed. Balance by June,2012.

9 Mass flow meter December,2013

3.10 When the Committee sought to know regarding any assessment has been done

on the safety measures installed by private companies in pursuance of MB Lal

Committee Recommendations, the Ministry gave the following details in its written

reply:-

“Assessment has been done on safety measures installed by private companies in line with OISD-116 &117 and as per the MB Lal Committee recommendations for following installations:

(i) Vadinar Refinery, Essar Oil Limited

(ii) Jamnagar Refinery, Reliance Industries Limited.

(iii) Bathinda Refinery, Hindustan Mittal Energy Limited.

(iv) Dhabol LNG unloading Facility, Ratnagiri Gas & Power Private Ltd.

(v) Exploration and Production installations of CIL & RIL”.

Issued raised by Industry on the Amended Standard

3.11 The Ministry informed that pursuant to the notification of standards in

November’2010, OISD and the Ministry received a number of representations from

RIL, BORL, and EOL raising questions on some of the issues pertaining to these

standards.

3.12 The Committee sought from the Ministry as to what were the main issues raised

by private companies in respect of OISD 116/117, the Ministry in their written reply

furnished the following:-

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“Subsequent to the notification of revised OISD standards 116 and 117, BORL, EOL and RIL raised the following issues:

i. Fire water requirement for Terminals with storage capacity exceeding 30,000 KL- Double fire contingency.

ii. Automatic actuated Rim seal fire detection (based on linear heat hollow metallic tube) and single shot foam protection system in Class A tanks.

iii. Installation of Remote Operated Long Range variable flow monitors”.

3.13 Asked by the Committee as to whether some of the M.B. Lal committee

recommendations were changed due to representations made by oil and gas

companies, the Ministry gave the following in its written reply :-

"No representation has been received from oil and gas companies for changing the recommendations of the MB Lal committee. All the recommendations of M B Lal committee were accepted by the Government and these are being implemented by the industry".

3.14 When the Committee wanted to know whether there is any move to review the

MB Lal committee recommendations, the Ministry gave the following in a written reply:-

“There is no move to review the recommendations of M B Lal Committee recommendations except for the fire water requirement as per double fire contingency scenario. It has been proposed by Chairmen Committee that the design water requirement for double fire contingency should be considered for large oil installations with total storage capacity of more than 30,000 KL”.

3.15 The Committee wanted to know the steps taken by the Ministry in the issue of

equivalency retroactivity and common fire-fighting facilities. The Ministry had furnished

the following in its written note to the Committee which details out the sequence of

activities carried out regarding the OISD standards 116 & 117:-

“Meeting Convened by MoP&NG Addl. Secretary, MoP&NG convened a meeting on 21st April’2011 to address the issues that had been raised. During the meeting, it was agreed that OISD could consider inclusion of clauses on equivalency, retroactivity and common fire-fighting facilities. However, it was also mentioned that any consideration of this should not be an impediment in implementation of the fire safety measures as mentioned in the OISD standards 116 and 117. Any change in the standards would require approval of the Safety Council.

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Steering Committee Meeting

Subsequently, Steering Committee (consisting of members from public and private oil industry) meeting was convened by OISD on 20th September, 2011, which was attended by the principal panelists drawn from entire Oil Industry, both private and public sector. In this meeting, it was agreed by the Steering Committee members for insertion of appropriate equivalency clause, retroactivity clause and common fire-fighting facility clause in the OISD Std.-116 & 117. As regards Equivalency Clause, it was also agreed that the Equivalent or Superior system would have to be approved by a technical committee set-up by OISD. The equivalency clause provides the industry with choice/flexibility, an aspect which is found in International Standards like National Fire Protection Association (NFPA). During this meeting, it was categorically mentioned that inclusion of equivalency or retroactivity after following the due process should not be an impediment in the implementation process being taken up by the industry.

10.2 During this meeting, some other issues, viz., necessity of rim seal protection system in all Class-A tanks irrespective of their size and diameter, requirement of remote HVLR facility etc. were also raised by the principal panelists. No consensus could be reached on these divergent views.

Referral to the Committee of Chairmen

Since there were enough divergent views and consensus could not be arrived at, OISD considered it prudent to refer the matter to the Committee of Chairmen for advice. The referral to Chairmen Committee was aimed at getting a broader perspective and requisite advice from the team whose earlier recommendations had been incorporated in the Standards.

The Chairmen Committee (consisting of Chairman- IOCL, C&MDs-ONGC, BPCL & HPCL) meeting was held on 24th Oct, 2011 and Chairmen Committee while accepting in principle the equivalency, retroactivity and common fire-fighting facilities clauses for incorporation in OISD-STD-116 & 117, decided to constitute a Technical Expert Committee (TEC) to review and recommend on the issues referred by OISD.

Outcome of Technical Expert Committee (TEC) meeting

The Technical Expert Committee (TEC) consisting of Director (R) - IOCL & Convener, Director(R)- BPCL and Executive Director (O&D)- HPCL deliberated the issues at length and met four times at New Delhi. To arrive at a scientific solution, the expert committee with due approval of Chairmen Committee co-opted two experts from EIL.

Expert Committee members after detailed deliberations; based on various International and National Standards and also on the basis of scientific evaluations submitted its report on 09.12.2011. TEC recommendations were

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reviewed by Chairmen Committee in a meeting on Jan 04, 2012 where the following decisions were taken:

Recommended inclusion of Equivalency Clause, Retroactivity Clause and Common firefighting clause in OISD-STD-116 & 117.

Accepted TEC recommendations:

Automatic rim seal fire detection & suppression system for all Class A tanks (as already provided in the amended OISD STDs 116,117)

Related to HVLRs (fixed / portable applications)

Supplementary fire water requirement (36x4=144 cu.m/hr) in design fire water calculations in OISD-STD-117.

TEC also suggested operating philosophy for HVLRs must be developed by oil companies for effective firefighting. Provision of manual operated HVLR in OISD STD 117, wherever sufficient distance is available within the installation from the point of hazards, and in-company fire-fighting infrastructure with respect to the location is available.

Removal of time schedule for implementation as provided in OISD-STD-116 & 117. Instead direction to be provided by OISD / MoPNG”.

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CHAPTER – 4

PROCUREMENT RELATED ISSUES

4.1 The Committee had wanted to know the progress of implementation of MB Lal Committee recommendations in the oil marketing companies. All the recommendations were to be implemented by 24 months i.e. by April, 2012. The Committee wanted to examine the issues that have resulted in delay of implementation of MB Lal Committee recommendations in the oil marketing companies.

4.2 The Major Engineering & Procurement related items that need to be installed as

part of MB Lal Committee recommendations are as under:

Provision of HVLRs.

Rim Seal Detection & Suppression System for Class ‘A’ FRTs.

Hydrocarbon detection system.

Double fire contingency.

Replacement of Hammer Blinds.

Provision of MEFG/ROSOV/CCTV/MFM.

4.3 The Committee were informed that the oil companies faced certain difficulties in

procurement of some items/equipments which were part of MB Lal Committee

recommendations/provisions of OISD std 116 and 117. When asked by the Committee

to elaborate, the Ministry stated the following in its written reply:

“It may be mentioned that oil companies have been implementing the various MB Lal Committee recommendations/ provisions of OISD-STD-116 and 117. As informed by OISD, basing on inputs received from PSU Oil Companies, about 58% of MB Lal Committee recommendations have been implemented. The balance are also under various stages of execution. The difficulties that were faced by oil companies in the areas of procurement of some of the equipment, as intimated by the oil companies to OISD are as under – a) Limited number of vendors including high quotes: Various equipment like hollow metallic Rim Seal fire protection, HVLR, Double Block Bleeder valve, remote operated shut down valves, Mass Flow Meters etc. in large quantities have been recommended for procurement and installation to enhance safety of the oil installations. The oil companies faced problems with

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limited number of vendors for procurement of such high value, high volume equipment. The limited number of vendors also resulted in non-competitive bidding process. As there were not many qualified vendors to supply such equipment and coupled with abnormally high quotes, oil companies faced with the problem of justifying the reasonability of the price quoted. It has been observed that in some cases the rates quoted by the vendors were as high as 400% above the estimate which left oil companies with no other alternative but to stop the tendering process and float fresh tender. In the process, the procurement process got delayed. b) Vendors not meeting the PQ criteria: As large quantities of equipment were being procured for the first time, it was decided that procurement should be done by one nominated company on behalf of the industry to get the best price. However, at the time of procurement, it was found that the vendors did not qualify the laid down PQ criteria of the company. Even after relaxing the PQ criteria, it was found that vendors did not even meet the relaxed criteria. Under such circumstances oil companies had to essentially cancel the tender. It has now been decided that instead of joint tender individual oil companies must procure the equipment for their respective companies. Not qualifying the PQ criteria and the decision to go for joint procurement resulted in delay in procurement and implementation thereof. c) Vendors quoting high rates apropos incorporation of the items in OISD standards: It has been observed that vendors were quoting high rates for the same item as compared to the past supply taking advantage of Mandatory/Statutory provision in OISD Standard. For example, the quoted price Hollow Metallic Rim Seal system prior to the amendment of the OISD-STD-116 and 117 and thereafter had been quoted at around 2.5 times more even after adjusting the inflation factor. The high quote of the equipment apropos amendment of the standard posed problem in the oil industry in justifying the reasonability of rate. d) Complaints from some quarters– The other hindrances which resulted in delay in implementation are due to complaints that were being received by the oil companies from various agencies including vendors, CVC. The complaints of the vendors and subsequent reference from CVC had to be settled before the normal procurement process could be followed. The

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settlement of the complaints through Independent External Monitors (IEM) took time which delayed the implementation process. Although oil companies in their right earnest intended to go ahead with the procurement process but due to the above constraints viz., limited vendors, not meeting the PQ criteria, quoting abnormal high rates, complaints from various quarters and its settlement delayed the implementation process particularly in respect of procurement of some of the items”

4.4 When IOC was enquired as to how decisions to retenders are taken, the IOC,

Chairman in the oral evidence stated as follows:

"The decision is taken on the merit and the circumstances of the case. There are instances where we have gone for re-tendering and there are instances where we have also accepted. So, there is a mix of both the acceptance and rejection. We normally do not calculate it in this manner. If it is required we will do it. I should also clarify that if it is a single tender case and it is more than the accepted rate then it is obviously re-tendered but wherever it is within the estimate but it is a single tender there could be both the situations".

Giving his views on delay in implementation the Secretary stated that major

delays have been due to clubbing when the vendors were disqualified. Later it

was declubbed.

4.5 The Committee have been informed by the Ministry that the procurement of

certain engineering items are causing delays due to which the implementation

schedule has been postponed. The Committee were concerned with the PSUs and

Oil Companies for such serious delays done by them in providing safety at oil

installations despite repeated commitments by the Ministry/PSU officials regarding the

implementation of safety at all oil installations. The Committee called for information

from the Ministry regarding the reasons for such delays in procurement of the key

equipments required for implementation of the revised OISD Standards. The Ministry’s

reply on each of the item is given below:

“High Volume Long Range Monitors (HVLR)

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The Ministry had informed the Committee that the OISD Standards 117 have provided for the following:

Provision of manual HVLRs is only for locations where all of the following are available:

1) In-house fire tenders with fulltime fire fighting crew.

2) Sufficient distance from the point of hazards.

For locations not meeting inter-distance norms as per OISD-118 : Provision of HVLRs even for tank farms storing Class-B/C products.

For locations meeting inter-distance norms as per OISD-118 : One trolley mounted HVLR for covering tank farm storing Class-B/C products.

Provision of portable HVLRs where it is not possible to install fixed HVLR at a safe distance from the tank because of space constraints.

The provisions proposed in the standard w.r.t HVLRs have not been diluted rather these have been made more stringent”.

4.6 When the committee sought to know the reasons for delay in procurement of

HVLR, the Ministry informed the following:

“Joint Industry Tender floated on 6th Dec, 2010.

• Tech bids opened on 18th Jan, 2011 for evaluation.

• Price bid opening planned in May, 2011 but could be done only in Jan, 2012.

• Delay due to:

requirement of stage wise clearance from individual OMCs.

handling of complaints from some quarters.

• Price bid finally opened on 04.01.12

• Price quoted by L-1 vendor higher than estimate.

• Negotiations held with L-1 party for price justification.

• One of the Vendor informed on 12/03/12 that for similar monitor, they have supplied to HMEL at ~50% lower than the price quoted by L-1 vendor.

• The final discounted offer of vendor received on 26/03/2012.

• Evaluation committee took final decision on 2nd April 2012 and Emergency procurement put up for management approval”.

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4.7 When asked whether the oil companies had negotiated with the suppliers of monitors on prices, during the oral evidence stated the following reply was given:-

"Sir, when the Tender Evaluation Committee were negotiating with the L1 bidder, we have received some work orders from Hindustan Mittal Refineries that they have supplied such monitors at 50 per cent lower cost. Hindustan Mittal has supplied the monitors at 50 per cent lower cost. The monitor which was supplied was 2000 gpm, and the tender was for 5750 gpm max. So, he has supplied a higher volume monitor at a lower cost. That information came to TEC and then TEC wanted to examine the offer which we have received from HEML at 50 per cent lower cost".

4.8 Asked to explain the delay in procurement of HVLR due to complaints, the

Ministry in its written reply stated the following:-

“CVC received a complaint regarding the HVLR tender which was forwarded by IOCL’s vigilance department to IOCL’s purchase department for review. As per CVC guidelines, the issues raised in the complaint were presented to Independent External Monitors four times. As per the advice of IEMs, following actions were taken:

a) The issues of the complaint were shared with other OMCs(HPCL & BPCL) for examination at their end.

b) Technical issues of the complaint were referred to independent fire experts for their opinion. Replies received from independent technical experts were presented to the IEMs.

c) Approval was taken at One level Higher(Director) for relaxation in Pre-Qualification criteria.

HPCL received a complaint that the three vendors participating in the tender are related to each other. HPCL referred the issue to their legal department. Various documents were asked from the vendor & scrutinized by HPCL’s legal department.

The process of scrutinizing the issues of the complaints delayed the procurement process by approximately 9-10 months.

The complaints have been handled as per CVC guidelines and purchase procedures”.

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On the query of the Committee the reasons for not opening the bids for which

tenders were floated and were promised to be done in two months the CMD ,

IOCL stated:-

“What I want to submit and what I did say is that we will make efforts. But, if you might recall, I had also said that since many companies are involved, IOCL on its own cannot go ahead and place the order. We have to have an evaluation process. All the companies have to accept it. Then only, we can do it. We are just the nodal agency to do work on behalf of everybody. So, this is one of the aspects which we had anticipated. It is not that we have stopped working. We are still working. We hope that we have given the status that some of them will be completed by 30th November and some other will be completed by 31st December. Even that status has been given in the presentation. We are not stopped. But, it might take two months. It might take a little more time. We have good reasons as to why it took more time. We are not trying to delay them. The Secretary has already clarified that we have not put a stop to it. We are going ahead. So, the status is this. We are able to present it. If you ask and give us an opportunity, we will given in writing as to what has happened from the last date and why there is a delay of one, two or three months. We will give that in writing. We have cogent reasons to submit before you”.

The matter was again raised during evidence on 29.8.2011. The work regarding tendering of HVLRs was to be completed in two months but even after a lapse of 8 months the process has not completed. When enquired the reasons for negotiating when as per CVC guidelines if the bid is within 5% of estimated amount there would be no negotiations. CMD, IOC stated that in the tender committee the CMD or officer immediate below are not involved. They can only ask the committee to expedite. They generally do not involve in the process as it will tantamount to vitiating their negotiating process.

4.9 Asked by the Committee regarding the current status on 29.3.12 in ordering of

HVLRs, the Secretary, MoPNG, during the oral evidence informed that:-

"Some orders have been placed and for the remaining, orders will be placed in April, 2012".

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4.10 The Committee have been given to understand that there was an unsolicited

offer from a company named ACRON for supply of HVLR monitors to OMCs. The

Committee sought the factual position on this issue from the oil companies. Regarding

ACRON email, the representative of BPCL are made the following comments during

oral evidence:

"Sir, when the tender was floated, the material of construction which was given in the tender was stainless steel and it was UL approved whereas this party, Akram Brass, has supplied with the material of construction as brass and also had UL approval at that particular point of time. When the technical bids were received and were getting evaluated, at that point of time the Technical Committee, which was there for evaluating the technical offers, rejected this officer saying that it is brass and it is not stainless steel. That is why, he was rejected on technical grounds. After that the price bid was opened. On 4th of January the price bid was opened and the Negotiation Committee started. During the month of February, the e-mails came to all the Chairmen and also all the TEC Members. All nine TEC Members got the e-mail from some source where he had given the ACRON offer at Rs. 19 lakh or something and he had also given the technical offer. Initially also he was saying: “Instead of brass I can give steel. Give me some time; I will get approval for steel.” It was not approved by the Technical Committee at that point of time. When this offer came, as it was addressed to Technical Committee Members, everybody thought that let us look at that particular cost, what is the exact cost and all that. After that initially the vender has given only two per discount and after the he has started increasing the discount up to 10 per cent. That is one point".

4.11 Elaborating further on the issue, the CMD, BPCL made the following

observation:-

“The fact is that the Technical Negotiating Committee took note of it and they use this as a negotiating point”.

RIM SEAL FIRE PROTECTION SYSTEM

4.12 When asked by the Committee as to what is the cost of the rim seal fire

protection system, the Ministry replied the following:

"As far as the rim seal fire protection for Refinery Division Rs. 987 crore for IOC and Rs. 350 crore for BPCL & HPCL".

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4.13 When the Committee wanted to know the progress made by the companies in

procurement of RIM SEAL system, the Ministry furnished the following reply:

IOCL

• Foreign consultant was deployed initially to firm the spec.

• JIC decided to go for Joint Tender on 8th Oct, 2010.

• Draft tender document for industry prepared on 2nd Feb, 2011.

• Comments of Industry members incorporated till June, 2011.

• Industry Working Group finalized tender document on 11th Sep, 2011.

• Since the value of job & volume of work was enormous and installation specific, decided to go for individual tender basis on 8th Dec, 2011.

• Tender floated by IOCL on 4th Feb, 2012

• Technical bid opened on 20th March, 2012

• Only 01 offer received..Under evaluation.

HPCL

• Tender floated in Feb, 2012.

• Tender opening scheduled on 29th March 2012.

• Evaluation to be completed by July, 2012.

• Expected award by August, 2012.

BPCL

• Tender floated on 31.01.2012.

• Pre-bid meeting conducted in Feb, 2012.

• Based on the technical clarifications from the vendors during the Pre-bid meeting, corrigendum is being issued with due date extension upto 23rd April, 2012.

• Evaluation expected by May, 2012

• Expected date of award June, 2012.

4.14 During oral evidence, the IOC official made the following observation to the

Committee regarding the complexity in installing the systems:-

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"That this has to be done on tanks which are having hydrocarbons. We are discussing here about the safety. One tank will have 65,000 crude oil. On the top of it, the job has to be done. The job has to be done by people who have no knowledge of refining. Our submission is that we should go slowly and we should not rush and do this job. This is our submission to you. Initially, for the IOC Refinery Division, we have issued a tender for 236 tanks. When we issued the tender, there were so many complaints and counter complaints. Then, we went to IEM also. They also suggested that this is a safety items.”

4.15 Adding further, the CMD, IOC stated:-

"It will be done in such a mega scale. It has never been done in any country in the world. For the first time, in such a mega scale it will be done. We were advised: “Do not do it in one go. Do it in phases.” So, we have gone to our Board. We have taken permission for going into phases. We have tenders, document, file but there is a vigilance guideline that we cannot reduced the number once we have already tendered out. If we go in two phases, automatically we have to retain that. I am talking of the refinery division".

4.16 Elaborating further about the steps, he further added:-

"Similarly, for the marketing division, we are doing it. Even if we purchase all these materials, these are to be put on the tank. We can hand over maximum three tanks at a time because there is crude, naphtha etc. At the same time, the refinery also has to run to supply products to the marketing division. These refineries are running for 50 years without any major fire incidence. There have been only seven fires in previous years. Out of that, five happened in the crude tank. I had explained last time that all these tanks are even double-sealed. Earlier one single seal was there. There will be vapor generation. So, we have gone for double sealing. We have a procedure".

It is seen in case of procurement of Rim Seal system by IOCL the technical bid

was opened on 20.3.2013 and only one offer was received which is under

evaluation.

When asked about the CVC guidelines on single tender, the

representative informed that work can be awarded on single tender basis

however, it requires board’s approval.

Giving the activity chart for procurement of Rim –Seal Fire Protection system

the Ministry in a post evidence reply informed that on 20.3.12 technical bids

were opened & only one offer received. Bid was also not meeting the tender

criteria. Hence it was proposed to cancel the tender. On 4.4.12 industry

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working group met on 4.4.12 and decided to revisit the rimseal specification in

light of the clarification sought by various bidders in the tenders floated by

OMC’s. It was also decided to take up the matter with OISD.

Hydrocarbon Detector

4.17 The Committee sought to know the progress made and reasons for delay in

installations of hydrocarbon detectors by the Oil Marketing Companies (OMCs) In

regard to delay in procurement of hydrocarbon detector, the Ministry in a presentation

given the following reasons:

• Industry members visited abroad to study type, location & usage of HC detectors in their locations.

• Requirement for liquid type detectors included as per HPC ( also MB Lal recommendation).

• Found less vendors for liquid type detectors.

• Took more than 3 months for IWG to finalize specifications for liquid detectors.

Double Fire Contingency

4.18 In an information furnished to the Committee, the Ministry had made the

following regarding the status in procurement of double fire contingency.

• “Concept of double fire contingency in 120 Marketing locations requires in-depth study as:

double fire contingency involves change in entire pipe size, capacity of water storage & fire water pumps.

each location has specific issues i.r.o of area, space etc.

• Industry referred to Consultant to work out the design.

• Expected award by Sept, 2012.

• No delay expected”.

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Replacement of Hammer Blinds

4.19 The Committee note that this is one of the important recommendations of MB

Lal Committee. In order to know the progress made in implementing this

recommendations, the Committee sought the status and reasons for delay if any from

the Ministry. The following were the reasons given by the Ministry:

• Technical committee took time to study alternatives to Hammer blinds including International practices.

• Finally Double Block & Bleeder valve was selected by OMCs.

• Common tender floated by BPC for OMCs on 9th Dec, 2011.

• Bid opened on 9th Feb, 2012.

• PQ criteria evaluated.

• Technical bid opening by 3rd April, 2012

• Price bid opening by end April, 2012.

• Award by individual OMCs expected by May, 2012.

Provision of MEFG

4.20 On being enquired to give an update regarding the procurement of MEFG by the

OMCs, the Ministry furnished the following to the Committee:

• “Joint Industry Tender by IOCL on 7th July, 2011

• Only one offer was meeting PQ criteria.

• Price quoted by vendor more than 400% of estimate.

• Tender thus cancelled and being re-floated by Individual OMCs.

• Tenders have been floated by OMCs.

• The exorbitant rate quoted was the main reason for delay”.

4.21 The Committee noted that for some items of procurement, only one bid has

been received. So the Committee wanted to know whether there are many suppliers of

these items. So the Committee enquired as to whether there are many manufacturers

of these items like MEFG and activated rim seal fire detection suppression system.

The Ministry in its reply furnished the following:-

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“As informed by OISD, it was initially decided by OMCs that procurement of some of the fire-fighting equipment would be undertaken jointly on industry basis in order to avail price advantage. However, in the process of tendering, it was found that vendors were not meeting the pre-qualification criteria prepared by the OMCs for combined procurement. As a result, there was less competition and one vendor qualified, resulting in high quotes. In case of MEFG, against the global tender floated on Industry basis, only one offer was found meeting the Tender Pre-Qualification Criteria. Rate Quoted by the only eligible vendor was approximately 400 % (for portable type) & 500 % (for fixed type) above the departmental estimate. The tender was refloated with reduced quantity. Two offers were received and upon scrutiny, none of the offers were found meeting the tender criteria. The tender in respect of Rim Seal protection system was also recommended for re-tendering as OMCs reported that vendors were not meeting the PQ criteria. Keeping in view the above situation, it has now been decided by OMCs to go ahead with procurement on individual company basis”.

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PART-II

OBSERVATIONS/RECOMMENDATIONS OF THE COMMITTEE

Recommendation No.1

Safety of oil installations

The Committee note that safety is a major and critical concern for oil and gas industry. Any laxity in upkeep/handling of highly inflammable oil and gas products can be a high risk to life, property and environment. In view of increasing activity in the sector and large number of oil and gas installations i.e.

exploration sites, refineries, pipelines etc. in the country, it is imperative for the oil and gas companies to have well developed safety systems and practices in place and strict compliance of safety norms by personnel working in the installations. The safety mechanisms of the companies are also required to be regularly monitored by the Ministry.

The Committee are, however, constrained to note that despite the safety

being of paramount concern, the Ministry of Petroleum and Natural Gas does not have implementation of safety measures as part of their mandate. To give due importance to the safety aspects, the Committee recommend that monitoring of safety measures in both public and private companies should be included in the

mandate of the Ministry. They further desire that the Ministry should place safety in both upstream and downstream companies as a thrust area of 12th Plan.

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Recommendation No.2

Need for Consolidation of safety legislations

The Committee note that 9 legislations (6 for downstream companies and 3 for upstream companies) have been enacted to deal with the safety aspects of oil

and gas industry. There are 7 agencies both in Central and State Governments dealing with enforcement of safety standards. The Committee note that some of the legislations like Explosives Act, 1884, Petroleum Act, 1934, Oil Mines Act, 1952 and Petroleum and Natural Gas Rules, 1959 under ORDA Act, 1948 are very

old and desire that the Government should revisit the safety clauses of these legislations pertaining to the oil and gas sector in the light of new technologies/practices evolved during the years in this sector.

The Committee opine that multiplicity of legislations to deal with the safety of oil and gas installations has made the enforcement process difficult. The Committee recommend the Government to bring out an umbrella legislation for

the oil and gas sector with the Ministry of Petroleum and Natural gas as nodal Ministry incorporating all safety related provisions contained in different Acts.

60

Recommendation No 3

Need for Single Agency to Enforce Safety

The Committee note that OISD has been functioning as the technical directorate of the Ministry of Petroleum and Natural Gas and has formulated 112 safety standards. OISD checks the implementation of these standards through various safety inspections but has statutory powers to enforce these standards

only for upstream offshore installations. The Committee further note that PESO which is under the administrative control of Ministry of Commerce and Industry is the competent authority to administer Petroleum Rules under Petroleum Act, 1934 which inter alia refers to 6 crucial OISD standards pertaining to fire

protection facilities for downstream oil and gas installations. The Committee further note that Director General of Mines Safety (DGMS) under the administrative control of Ministry of Labour and Employment has been vested with powers for enforcing safety rules for onshore oil and gas installations.

The Committee have been informed that there is a proposal to transfer the PESO’s job relating to Petroleum Rules to OISD. The Committee are in agreement

with this move and desire that the process of transfer should be completed at the earliest. The Committee further recommend that the Ministry should take up the matter with appropriate authorities for the transfer of DGMS responsibilities under the Petroleum Rules to OISD as well.

The Committee would like to point out that multiple agencies enforcing

different set of safety laws will lead oil industry to comply with number of authorities for safety related laws and regulations. The Committee view that there will be no clear accountability on the part of agencies as they may blame other agencies for any lapses which lead to incidents. The Committee, therefore, recommend that OISD should be made the nodal agency to formulate, monitor

and enforce the OISD standards and other applicable laws for the entire oil and gas sector.

61

Recommendation No 4

Oil Industry Safety Directorate (OISD)

The Committee note that OISD carries out safety audits/inspection and conducts pre commissioning safety audits of PSU’s. The Committee note that these standards are implemented on self regulatory basis by the industry.

The Committee observe that 59 recommendations out of 170 in BPCL-Kochi refinery and 14 out of 78 recommendations in CPCL-Chennai are based on the safety audits conducted by OISD between January and June 2010

respectively have not been implemented. The Committee further note that 6 recommendations pertaining to safety audit conducted during June, 2005 at MRPL are still pending. The Committee fail to understand the delays in implementation of these recommendations and emphasize that the

recommendations made by OISD should be considered with due seriousness by Oil Marketing Companies and implemented in a time bound manner.

The Committee note that OISD has not been vested with statutory authority to penalize the violators of safety standards. The Committee feel that this has rendered OISD a mere recommendatory body with no powers to enforce the

stipulated standards. The Committee are of the opinion that in the oil industry, it is essential to adhere to safety standards and implement safe working practices. The Committee, therefore, recommend that the Ministry should confer statutory status on OISD to enable it to enforce the safety standards with legal authority and also to take penal action against the non-compliance thereof.

62

Recommendation No 5

Manpower requirements of OISD

The Committee note that the total sanctioned manpower in OISD is 66 but the actual manpower is only 29. A large number of posts are vacant in Exploration & Production (E&P) side as only 6 posts are filled against the actual strength of 28 posts. The Committee also note that OISD draws its personnel only

on deputation from public sector oil companies and there are no permanent staff or its own cadre. The Committee understand that this is due to fact that the oil companies are not able to spare their officials which the Ministry has also admitted as an area of concern.

The Committee are of the view that since OISD has no permanent cadre with less than half of the sanctioned manpower in place, the efficacy of the

enforcement of safety standards is compromised. The Committee, therefore, recommend that the Ministry should urgently look into the matter and take steps to fill up the vacant posts by exploring the options other than deputation. The Committee further desire that the Ministry should consider manning OISD with a permanent cadre of officers in a time bound manner.

63

Recommendation No 6

Safety Recommendation implementation

The Committee note that MB Lal Committee which was constituted in the aftermath of the Jaipur fire accident in October, 2009, came out with a Report containing 113 recommendations. The Ministry while accepting the Report specified a time line of 24 months i.e. by end of April 2012 in consultation with

OMCs for the implementation of these recommendations. The Committee are constrained to note that by April, 2012, only 66 recommendations out of 113 have been implemented. The Committee further note that the timeline has been shifted to December, 2014 for implementation of some of the recommendations.

The Committee are unhappy that though the initial timeline has expired,

the recommendations especially pertaining to procurement and installation of important safety equipments are still pending. This reflects poorly on the managements of OMC’s and their planning and implementation abilities. The Committee strongly deprecate the dilatory tactics of the OMCs and inefficient

supervision of the Ministry resulting in inexplicable delays in the implementation of safety standards.

Taking into account all factors, the Committee would, therefore, recommend that the Ministry should direct the OMC’s to fast track the procurement of safety items and desire that the Secretary should monitor the progress on fortnightly basis. The Committee would like to be apprised of the implementation status within a month.

64

Recommendation No 7

Training for personnel of oil marketing companies

The Committee note that OISD has prescribed standards for training of personnel and provision of personal protective equipments and life saving appliances at the installations. They are however, surprised to note that as pointed out by MB Lal Committee, the personnel deployed at Jaipur IOC terminal

at the time of the accident had no safety training and also Self Contained Breathing Apparatus (SCBA) which is an important safety equipment was not available. The Committee wonders whether these issues were pointed out by OISD when it conducted the safety audits at this installation. The Committee

observe that this clearly indicates gaps in the safety preparedness to handle the accidents in oil and gas sector. The Committee are constrained to note that M.B.Lal Committee recommendations for hands on training in fire fighting has not been implemented even one year after the expiry of the time line set for the purpose.

The Committee are of the opinion that training related to safety should be

an integral part of work in the oil industry. The Committee, therefore recommend that safety training to all employees should be made mandatory and at the same time ensuring the availability of personnel with protective equipments and life saving appliances at all oil and gas installations. The Committee also desire the

Ministry to ensure comprehensive safety audits in oil installations by incorporating the aspects not already covered. The Committee recommend that all oil and gas installations should run mandatory disaster response simulations to ensure that adequate response mechanisms are in place for any eventuality.

65

Recommendation No.8

Accountability for safety issues

The Committee note that there has been increase in the number of incidents in oil and gas installations during the last few years. During 2010-11 there were a total of 84 incidents consisting of 70 accidents and 14 relating to fire leading to a loss of Rs.34.15 crore. The Committee find that such high number of

incidents in a year unacceptable and feel that the oil companies should have zero tolerance for accidents. The Committee desire that all incidents including minor ones and near miss should be thoroughly investigated and accountability should be fixed. The Committee suggest that oil and gas companies should

designate the senior most official of the unit as the nodal officer for safety related matters to ensure closer supervision and effective monitoring of safety standards.

66

Recommendation No 9

Private sector oil industries should also be audited

The Committee note that the OISD conducts pre-commissioning safety audits for the oil industry. The Committee, however, observe that the pre commissioning safety audits are being done only for Public sector oil companies and not for private sector oil companies. This is not a desirable situation as

safety standards should be applied uniformly for both public and private sector companies.

The Committee, therefore, recommend that Ministry should take steps to bring the private sector oil installations under OISD for complying with precommissioning safety audit and other such safety measures applicable to the industry.

67

Recommendation No 10

Outside experts in Safety Council

The Committee note that the Safety Council includes Members comprising of all Joint Secretaries and Advisors of the Ministry of Petroleum & Natural Gas, Chief Executive Officers of all of PSU’s of the oil industry, Chief controller of Explosives, Advisor, Fire to the Govt of India and the DG of Factory Advice,

Service and Labour Institutes.The Committee also note that the Secretary, MOPNG is Chairman of Safety Council.

The Committee observe from the composition of Safety Council, that it does not have any representation from academia or renowned experts in the field to advise on safety aspects. The Committee opine that since safety in the oil industry is of vital importance, it is imperative that the highest decision making

body in the country for safety issues should have inputs and contribution of experts in the field. Therefore, the Committee recommend that the Ministry should appoint national and international experts including from other PSUs like BHEL, NTPC etc. to the Safety Council.

68

Recommendation No 11

Dilution of OISD Standards 116 and 117.

The Committee were informed that the OISD Standards 116 and 117 relating to fire protection facilities in downstream companies were revised after inputs from MB Lal Committee and Chairmen Committee. The Committee note that the OISD and the Ministry received a number of representations from private

companies raising some issues pertaining to revised standards. The Committee further note that after receipt of the representations the issues were referred first to Steering Committee, then to Chairman Committee and thereafter to Technical expert committee and finally certain clauses like Equivalency clause,

retroactivity clause and common firefighting clause in OISD STD-116 and 117 have been accepted for inclusion.

The Committee would like to point out that in the written replies of the Ministry and also during oral submissions before the Committee, the Secretary had maintained that there is no move to review or dilute the OISD standards 116/117 and the same are being implemented by the industry. The Committee feel

that this is an ambivalent stand of the Ministry since the inclusion of Equivalency clause, retroactivity clause and common firefighting clauses in OISD STDs clearly indicates dilution of the OISD standards apart from derailing the implementation schedule. The Committee, therefore, strongly deprecate the Ministry and OMCs

for misleading them on this important issue and would expect more diligent and responsible approach of officials while making submissions before the Committee. The Committee recommend that there should be no dilution in OISD safety standards 116 & 117 till the implementation of M.B.Lal Committee Report.

69

Recommendation No 12

High Volume Long Range Monitors (HVLR)

The Committee note that OISD Standard 117 have provided for installation of High Volume Long Range Monitors (HVLRs) in the oil installations. The Committee note that the Joint Industry tender for procurement was floated on 6th December, 2010 and the technical bids opened on 18th Jan, 2011 for evaluation. However, the price bids which were to be opened in May, 2011 could be opened only in January, 2012. This delay has been attributed to obtaining stage wise clearance from individual OMCs and handling of complaints from some quarters. The Committee are not convinced by reasons given by the oil companies. They are unable to understand the requirement of stage wise clearance from individual OMCs when the Joint Industry tender has been floated. Though some of the delays were procedural due to handling of complaints, the Committee could not but come to a conclusion that the OMCs are not serious in early procurement of these items.

The Committee are further constrained to note that after more than 16 months only a bare minimum quantity for emergency procurement has been put up for approval. The Committee deplore the kind of insensitivity shown by the oil companies in procurement of such a key safety equipment. The Committee would like to know the reasons for making only an emergency procurement.

The Committee note that after the technical bids were opened there was an unsolicited offer from Akron Bros whose tender was earlier rejected on technical grounds and the price quoted by Akron Bros was used as negotiating point with other vendors. The OMCs claim that it is in accordance with CVC guidelines and purchase procedures. The Committee desire that the issue needs to be verified and reported upon by the Ministry and recommend the matter be referred to CVC to see if there is any violation of guidelines in taking Akron Bros offer as negotiating point with other vendors.

70

Recommendation No 13

Rim Seal Fire Detection System

The Committee note that the Rim Seal Fire Detection System is an the important safety equipment that needs to be installed in the tanks carrying hydro carbons. The Committee note that the about 618 nos. of this system are required involving an expenditure of Rs. 1125 crore for all the three oil marketing

companies. The Committee note it was decided on 8th October, 2010 that this item was to be procured on Joint Industry basis. The Industry Working Group finalized tender document on 11th September, 2011.

The Committee further note that as the volume of work was enormous and installation specific, the OMCs decided to go for individual tender basis on 8th December, 2011. The Committee express unhappiness at the time taken by the 3

OMCs for finalizing the tender document which almost took one year and then to go for company-wise tender.

The Committee are further anguished that after all the exercise Ministry has now informed that there is a proposal to cancel the tender since only one offer was received and the bid was also not meeting the tender criteria. Industry

working group has now decided to revisit the Rim Seal specification. The Committee are dismayed that an important recommendation of the MB Lal Committee has not progressed even after two years and the process has to start afresh. The Committee would urge the Ministry to relook at the decision of the

OMCs as there appears to be a deliberate attempt on the part of OMC’s to delay in implementing this safety recommendation.

71

Recommendation No 14

Hydrocarbon Detection System

The Committee note that requirement of Hydrocarbon Detection System was one of recommendations of MB Lal Committee. The Committee also note that the Industry members visited abroad to study type, location and usage of HC detectors in their locations and decided for liquid type detector. The industry

working group took more than 3 months to finalize specifications. The Committee further note that there are few vendors for liquid type detectors and the latest time line furnished by the Ministry indicate the completion time by March, 2013 to December, 2014. The Committee deplore the fait accompli

provided by the oil companies and the Ministry regarding the timeline as the original timeline have ended and the revised time line of December, 2014 is another 30 months away.

The Committee desire the Ministry and OMCs to submit the explanation of the officials concerned on the inordinate delays in the matter and also take required measures to prepone the timelines for early implementation of safety standards.

72

Recommendation No 15

Procurement of Medium Expansion Foam Generators (MEFG)

The Committee note that MB Lal Committee has recommended for provision of Medium Expansion Foam Generators (MEFG) at marketing locations. The Committee note that the Joint industry tender in this regard was floated by

IOCL on 7th July 2011. However, only one offer was meeting Pre-qualification criteria and the price quoted by the vendor was 400% of estimate. The Committee have been informed that due to exorbitant rate quoted by vendor, the tender was cancelled and refloated by individual Oil marketing companies. The Committee

further note that after retendering by individual oil marketing companies in the case of IOCL, two offers were received but none found meeting the tender criteria. Hence the tender was refloated again on 4.4.2012 with relaxed PQ criteria.

The Committee are dismayed at the considerable time lost in tendering and retendering due to which procurement of important safety equipment has got delayed. Though 400% price quoted by vendor is very much on higher side, the

decision to go for retendering was not a prudent one since the offers received have been found not meeting the tender criteria. The Committee hope that relaxed PQ criteria for the refloated tenders does not amount to dilution of safety standards.

The Committee are disappointed that on one pretext or other, the

procurement of items has been getting delayed. The Ministry also does not seem to take any action on directing the OMC’s to adhere to the timelines committed to the Ministry. The Committee therefore recommend that the timelines already committed should be strictly adhered to.

73

Recommendation No 16

Enquiry on delay in procurement

The Committee note that the MB Lal Committee had made several recommendations and OISD also had revised its standards because of which the oil companies need to procure important safety equipments. The Ministry had

consulted the OMC’s regarding implementation of these recommendations and had agreed for 24 month timeline.

Now the Committee have been informed by the ministry that the OMC,s have been facing the following important issues relating to procurement.

i) Limited number of vendors to supply items ii) High price quoted by vendors iii) Lack of experience in dealing similar works iv) Complaints received about the tender process

The Committee understand that the Oil Marketing Companies are bound by

their own procurement procedures and also CVC guidelines. The Committee are of the view that the delay that has happened is inexplicable and would expect the Ministry and OMC‘s should have shown more alertness and urgency in procurement rather than hiding behind procedures. The Committee, therefore

recommend that the Ministry should order an enquiry into the entire process of procurement and delay in procurement and also whether the procedure followed were in conformity with the extant rules in place. The Committee may be apprised of the outcome of the above enquiry within a period of one month.

New Delhi; 21 May, 2012 31Vaisakha, 1934 (Saka)

ARUNA KUMAR VUNDAVALLI, Chairman, Standing Committee on

Petroleum & Natural Gas.

74

IMPLEMENTATION STATUS OF Major items of M. B. Lal - Committee recommendations Recom. No.

Item Description Implementation Schedule agreed with MoPNG

Steps involved

IOCL

BPCL HPCL ONGC OIL

10.6(b)

The Rim Seal fire detection and protection system shall be installed in all Class ‘A’ products in the terminal.

24 moths. OISD-STD-116/117 specifies Tanks above 5000 KL by Oct 2012 and Tanks below 5000KL by October 2013

As per Sl. No-1 of Annexure-II enclosed.

As per Sl. No-1 of Annexure-II enclosed

As per Sl. No-1 of Annexure-II enclosed

As per Sl. No-1 of Annexure-II enclosed

As per Sl. No-1 of Annexure-II enclosed

As per Sl. No-1 of Annexure-II enclosed

10.2 (i), (ii), (iii)

Push buttons on the MOV should be brought just outside the tank dyke and associated work

12 months By April, 2011

Completed: 47 locations In progress 5 locations Target: 28.2.2012

Completed: 15 locations In progress 6 locations Target: 28.2.2012

Completed in all 21 locations

Progressively being completed by 31.3. 20.

In progress

10.6(a) Fire water system augmentation for double fire contingency in marketing/ ctf and pipeline installations

Fire water System: 48 Months i.e. by Nov, 2014 Fire Water pumps : 24 months Nov 2012

As per Sl. No-2 of Annexure-II enclosed.

As per Sl. No-2 of Annexure-II enclosed

As per Sl. No-2 of Annexure-II enclosed

As per Sl. No-2 of Annexure-II enclosed

As per Sl. No-2 of Annexure-II enclosed

As per Sl. No-2 of Annexure-II enclosed

10.2 (vi)

Main emergency shutdown switch which should be located in the control room should also activate the MOVs to close.

2 Months by July’2010

Completed : 43 locations In progress : 2 locations Target : 28.2.2012

Completed : 16 locations In progress : 5 locations Target : 31.3.2012

Completed in all 21 locations

At Hazira : in progress Other location : Not Applicable

Partly completed Balance in Progress

10.2 (xxix)

Hydrocarbon (HC) detectors shall be installed near all potential leak sources of class ‘A’ and ‘B’ petroleum products e.g. tank dykes, tank manifolds, pump house manifolds, etc. Further, HC detectors of proper type should be selected and should be proof tested and maintained in good condition

6 moths By October’2010

As per Sl. No-5 of Annexure-II

As per Sl. No-5 of Annexure-II

As per Sl. No-5 of Annexure-II

As per Sl. No-5 of Annexure-II

As per Sl. No-5 of Annexure-II

As per Sl. No-5 of Annexure-II

10.2 (xxx)

Protection for Dyke Area/ Spill Fire (MEFG provision) for Marketing/CTF/Pipeline installations

Progressively by April 2012

As per Sl. No. 4 of Annexure-II

As per Sl. No. 4 of Annexure-II

As per Sl. No. 4 of Annexure-II

As per Sl. No. 4 of Annexure-II

As per Sl. No. 4 of Annexure-II

As per Sl. No. 4 of Annexure-II

10.3(a) Avoid hammer blind as an equipment in the plant design. Only a closed system design should be adopted. It is understood that other OMCs/MNC’s are already using such designs in their installations. Using a

24 months Progressively by May 2012

Tendering Joint Tender Floated on 09.12.2011 Pre bid meeting held on 21.12.2011 Tender received on

Joint Tender Floated on 09.12.2011 Pre bid meeting held on 21.12.2011 Tender received on

Joint Tender Floated on 09.12.2011 Pre bid meeting held on 21.12.2011 Tender received on

No Hammer blind valve in operation Therefore Not applicable

Under progress

75

Plug valve or a Ball Valve in place of the Hammer Blind should be an acceptable option.

09.02.2012

09.02.2012

09.02.2012

10.3(b) The first body valve on the tank should be Remote Operated Shut Off Valve (ROSOV) on the tank nozzle inside the dyke with Remote Operation only from outside the dyke as well as from the control room. ROSOV should be fail safe and fire safe. It should have only ‘close’ feature and not ‘open’ and ‘stop’ from control room. However, it should have ‘close’, ‘open’ & ‘stop’ operation from the panel located outside the dyke.

24 months by May’2012

TENDERING Joint Tender Floated on 18.01.2012 Pre bid meeting held on 03.02.2012 Tender opening on 02.03.2012

Joint Tender Floated on 18.01.2012 Pre bid meeting held on 03.02.2012 Tender opening on 02.03.2012

Joint Tender Floated on 18.01.2012 Pre bid meeting held on 03.02.2012 Tender opening on 02.03.2012

Completion by Nov’2013

Under Progress:

10.6(c) Remote operated long range foam monitors (1000 GPM and above) to fight tank fires shall be provided which should be of variable flow.

24 months by November’2012

TENDERING As per Sl. No.3 of Annexure-II enclosed

10.2 (xxxi)

An emergency kit shall be provided consisting of safety items viz. fire suites, various leak plugging gadgets, oil dispersants and oil adsorbents, lifting jacks (for rescue of trapped workers), high intensity intrinsically safe search lights for hazardous area, etc. and shall be readily available at the terminals.

Progressively by October 2012

As per Sl. No. 8 of Annexure-II enclosed

As per Sl. No. 8 of Annexure-II enclosed

10.3(q) A CCTV should be installed covering tank farm areas and other critical areas. The CCTV can nowadays provided with an alarm to provide warning in case of deviation from any normal situation. The CCTV monitoring station should be provided both in the control room as well as in the Security cabin/office.

12 moths By May’2011

Completed : 121 locations In progress : 13 locations Target : 31.3.2012

10.3(n) Wherever PLT transfers take place, to avoid pilferages, a Mass Flow Meter with Integrator shall be provided on delivery pipelines.

12 moths By May’2011

TENDERING Under finalization

76

10.2 (iv), 10.2 (xxiv), 10.3 (k)

Adequate lighting in operational areas should be ensured.

18 moths by November’2011

Completed : 89 locations In progress : 49 locations Target : progressively by 30.6.2012

Completed : 42 locations In progress : 39 locations Target : progressively by 31.3.2012

Completed : 20 locations In progress : 52 locations Target : progressively by 31.3.2012

Implemented Implemented

10.3(o) Tank Dyke Valves should be provided with position indicator (open or close) in control room and necessary hardware and instrumentation should be provided for this.

9 moths By Feb’2011

Completed : 109 locations In progress : 29 locations Target : progressively by 28.2.2012

Completed : 36 locations In progress : 45 locations Target : progressively by 31.3.2012

In progress : 58 locations Target : progressively by 31.3.2012

In progress Target 30.11.2012

Under Implementation

77

Annexure-II

List of OISD standards with history of their updation year.

Legends: A: Amendment, R: Revision, Re : Reaffirm

List of OISD standards with history of their updation year. Sr.No Standard Name of Standard Release of first

edition (Year) Last Updated on

(Year) 1 OISD-STD-105 Work Permit System 1988 A- 1998

R- 2004

2 OISD-STD-106 Pressure Relief & Disposal System 1988 A- 1999 R- 2010

3 OISD-RP-108 Recommended Practices on Oil Storage and Handling

1997

4 OISD-STD-109 Process Design and Operating Philosophies on Blow Down & sewer system

1988 A- 1999

5 OISD-RP-110 Recommended Practices on Static Electricity

1990 A - 1999

6 OISD-STD-111 Process Design & Operating Philosophies on Fired Process Furnace

1989 A- 1999

7 OISD-STD-112 Safe Handling of Air Hydrocarbon Mixtures & Pyrophoric Substances

1989 A- 2002

8 OISD-STD-113 Classification of Area for Electrical Installations at Hydrocarbon Processing & Handling Facilities

1996 A- 2001

9 OISD-STD-114 Safe Handling of Hazardous Chemicals 1998 A- 2002 R- 2010

10 OISD-GDN-115 Guidelines on Fire Fighting Equipment and Appliances in Petroleum Industry

2000

11 OISD-STD-116 Fire Protection Facilities for Petroleum Refineries and Oil/Gas Processing Plants

1991 A-1998 A-2002 A-2005 R-2007 A-2008 A-2010

12 OISD-STD-117 Fire Protection Facilities for Petroleum Depots, Terminals, Pipeline Installations & Lube oil installations

1989 A-2000 A-2005 R-2007 A-2008 A- 2010

13 OISD-STD-118 Layouts for Oil and Gas Installations 1988 R-1995 A-2000 R-2004 A-2006 A- 2008

78

List of OISD standards with history of their updation year. Sr.No Standard Name of Standard Release of first

edition (Year) Last Updated on

(Year) 14 OISD-STD-119 Selection, Operation and Maintenance

of Pumps 1990 A-1999

A-2001 R- 2008

15 OISD-STD-120 Selection, Operation and Maintenance of Compressors

1990 A- 1999 R -2008

16 OISD-STD-121 Selection, Operation Inspection & Maintenance of Steam & Gas Turbines

1990 A-1999 R- 2010

17 OISD-STD-122 Selection, Operation and Maintenance of Fans, Blowers, Gear Boxes, Agitators & Mixers

1990 A-1999 R-2008

18 OISD-STD-123 Selection, Operation and Maintenance of Rotary Equipment Components

1990 A-1999 R-2008

19 OISD-RP-124 Predictive Maintenance Practices 1990 A-1999 A-2005 R-2007

20 OISD-STD-125 Inspection & Maintenance of Mechanical Seals

1990 A-1999 A-2005 R-2007

21 OISD-RP-126 Specific practices for installations and maintenance of Rotating Equipment

1990 A-1999 A-2005 R-2007

22 OISD-STD-127 (Old) OISD-STD-127 (New)

History Record of Rotary Equipment Selection, Operation, Inspection & Maintenance of Diesel Engines

1990 2010

A-19

23 OISD-STD-128 Inspection of Unfired Pressure Vessels 1988 A-1999 R-2010

24 OISD-STD-129 Inspection of Storage Tanks 1988 A-1999 R-2006

25 OISD-STD-130 Inspection of Piping Systems 1988 Re-1999 R-2008

26 OISD-STD-131 Inspection of Boilers 1990 A- 1999 27 OISD-STD-132 Inspection of Pressure Relieving

devices 1990 Re- 1999

28 OISD-STD-133 Inspection of Fired Heaters 1990 A-2000 29 OISD-STD-134 Inspection of Heat Exchangers 1990 A-1999

R-2010 30 OISD-STD-135 Inspection of Loading & Unloading

hoses for Petroleum Products 1996 A-2001

31 OISD-STD-137 Inspection of Electrical Equipment 1990 Re-1999 A-2010

32 OISD-STD-138 Inspection of cross country pipelines – Onshore

1990 A-2001 R-2003

33 OISD-STD-139 Inspection of pipelines – Offshore 1990 A-2001

79

List of OISD standards with history of their updation year. Sr.No Standard Name of Standard Release of first

edition (Year) Last Updated on

(Year) 34 OISD-STD-140 Inspection of jetty pipelines 1990 A-2001 35 OISD-STD-141 Design and Construction requirements

for cross country hydrocarbon pipelines 1990 A-2001

R-2003 36 OISD-STD-142 Inspection of fire fighting equipments

and systems 1996

37 OISD-STD-144 Liquefied Petroleum Gas (LPG) Installations

1994 A-2000 A-2001 A-2002 R-2005 R-2008

38 OISD-GDN-145 Guidelines on Internal Safety Audits (Procedures and Checklist)

1995 A-2001

39 OISD-RP-146 Preservation of idle electrical equipment 1993 A-2000

40 OISD-RP-147 Inspection & safe practices during electrical installations

1993 A-2000 A-2002

41 OISD-RP-148 Inspection & safe practices during overhauling electrical equipment

1993 Re-2000

42 OISD-RP-149 Design aspects for safety in electrical systems

1996 A-2001

43 OISD-STD-150 Design and Safety Requirements For Liquefied Petroleum Gas Mounded Storage Facility

2000 A-2002 A-2003 A-2008

44 OISD-STD-151 Safety in Design, Fabrication and Fittings : Propane Tank Trucks

1999

45 OISD-STD-152 Safety Instrumentation for Process System in Hydrocarbon Industry

1993 A-2001 R-2010

46 OISD-STD-153 Maintenance & inspection of safety instrumentation in hydrocarbon industry

1993 A-2001

47 OISD-STD-154 Safety aspects in Functional Training 1993 A-2001 48 OISD-STD-155

(Part I) OISD-STD-155 (Part II)

Personal Protective Equipment (Part I Non-Respiratory equipment) (Part II Respiratory Equipment)

1995 1995

A-2002 A-2010

49 OISD-STD-156 Fire Protection Facilities for Ports Handling Hydrocarbons

1992 R-2005

50 OISD-RP-157 Recommended Practice for Transportation of Bulk Petroleum Products

1996

51 OISD-RP-158 Recommended Practices on Storage and Handling of Bulk Liquefied Petroleum Gas

1997 A-2000

52 OISD-STD-159 LPG Tank Trucks - Requirements of Safety on Design/Fabrication & Fittings

1997 A-2002

80

List of OISD standards with history of their updation year. Sr.No Standard Name of Standard Release of first

edition (Year) Last Updated on

(Year) 53 OISD-STD-160 Protection to fittings mounted on

existing LPG tank trucks 1993 1993

54 OISD-GDN-161 LPG Tank Truck Incidents : Rescue & Relief Operations

1993 R-2003

55 OISD-STD-162 Safety in installation and maintenance of LPG Cylinders Manifold

1995

56 OISD-STD-163 Process Control Room Safety 1996 A-2001 R-2004

57 OISD-STD-164 Fire Proofing in Oil & Gas Industry 1998 58 OISD-GDN-165 Guidelines for Rescue & Relief

Operations for POL Tank Truck Accident

1999

59 OISD-GDN-166 Guidelines for Occupational Health Monitoring in Oil and Gas Industry

1997

60 OISD-RP-167 POL Tank lorry Design & Safety 1997 61 OISD-GDN-168 Emergency Preparedness Plan for

Marketing Locations of Oil Industry 1997

62 OISD-GDN-169 OISD Guidelines on Small LPG Bottling Plants (Design and Fire Protection facilities)

1993 A-2001 A-2008

63 OISD-STD-170 Inspection, Maintenance, Repairs & Rehabilitation of Foundations & Structures

1997

64 OISD-STD-171 Preservation of Idle Static & Rotary Mechanical Equipments

1998

65 OISD-STD-173 Fire Prevention and Protection System for Electrical Installations

1996 A-2001 R-2003

66 OISD-RP-174 Well Control 1998 R-2008 67 OISD-STD-175 Cementing Operations 1999 R-2008 68 OISD-STD-176 Safety Health & Environment Training

For Exploration & Production (Upstream) Personnel

1996 R-2003

69 OISD-STD-177 Inspection & Maintenance of Thermal Insulation

1998

70 OISD-GDN-178 Guidelines on Management Of Change 1999 71 OISD-STD-179 Safety Requirements On Compression,

Storage, Handling & Refueling Of Natural Gas For Use In Automotive Sector.

1998

72 OISD-GDN-180 Lightning Protection 1999 73 OISD-STD-181 Geophysical Operations 1999 A-2010 74 OISD-GDN-182 Safe Practices for Workover and Well

Stimulation Operations 2000 R-2010

75 OISD-STD-183 Standard on Logging Operations 1999

81

List of OISD standards with history of their updation year. Sr.No Standard Name of Standard Release of first

edition (Year) Last Updated on

(Year) 76 OISD-STD-184 Standard on Replacement of Personal

Protective Equipment & Life Saving Appliances

2000

77 OISD-GDN-185 Wire Line Operations 2002 78 OISD-GDN-186 Simultaneous Operations in E&P

Industry 2000 R-2008

79 OISD-STD-187 Care And Use Of Wire Rope 2000 80 OISD-STD-188 Corrosion Monitoring Of Offshore &

Onshore Pipelines 2000

81 OISD-STD-189 Standard on Fire Fighting Equipment For Drilling Rigs, Work Over Rigs And Production Installations

2000

82 OISD-STD-190 Derrick Floor Operations (Onshore Drilling / Workover Rigs)

2000

83 OISD-STD-191 Oil Field Explosive Safety 2000 84 OISD-GDN-192 Safety Practices during Construction 2000 85 OISD-GDN-193 Guidelines for Gas Lift Operations &

Maintenance 2001

86 OISD-STD-194 Standard for Storage & Handling Of Liquefied Natural Gas (LNG)

2000

87 OISD-STD-195 Safety in Design, Operation, Inspection and Maintenance of Hydrocarbon Gas Compressor Stations and Terminals

2001

88 OISD-GDN-196 Guidelines for Seeking Environmental Clearance of Development Projects in Petroleum Industry

2001

89 OISD-GDN-197 Guidelines for Environmental Impact Assessment

2001

90 OISD-GDN-199 Guidelines for Conducting Environmental Audit in Upstream Petroleum Sector (Onland)

2000

91 OISD-GDN-200 Guidelines for Preparation Of Oil Spill Response Contingency Plan

2000 A-2002

92 OISD-RP-201 Environment Management in E&P Sector

2001 R-2008

93 OISD-GDN-202 Inspection of Drilling and Workover Rig Mast / Sub-Structure

2002

94 OISD-GDN-203 Operation, Maintenance &Inspection Of Hoisting Equipment

2003

95 OISD-GDN-204 Medical Requirements, Emergency Evacuation And Facilities (for Upstream)

2001

96 OISD-RP-205 Crane Operation, Maintenance & Testing (for Upstream)

2002

97 OISD-GDN-206 Guidelines on Safety Management 2001

82

List of OISD standards with history of their updation year. Sr.No Standard Name of Standard Release of first

edition (Year) Last Updated on

(Year) System in Petroleum Industry

98 OISD-GDN-207 Contractor Safety 2002 99 OISD-STD-210 Storage, Handling and Refueling of

LPG for automotive use 2002 A-2010

100 OISD-GDN-211 Safety in Petroleum Laboratories 2003 101 OISD-GDN-212 Guidelines on Environmental Audit in

Downstream Petroleum Sector 2002

102 OISD-STD-214 Cross Country LPG Pipelines 2006 103 OISD-STD-216 Electrical Safety in Onshore Drilling

&Workover Rigs 2007 A-2010

104 OISD-GDN-218 Guidelines for Safe Rig- Up & Rig- Down of Drilling and Work-Over Rigs

2004

105 OISD-GDN-219 Guidelines on Field Inspection, Handling & Testing of Casing Pipe & Tubing

2004

106 OISD-GDN-224 Monitoring & Control of Volatile Organic Compounds Emission

2006 2006

107 OISD-STD-225 Storage, Handling & Dispensing at Petroleum Retail Outlets

2007 A-2010

108 OISD-STD-226 Natural Gas Transmission Pipelines and City Gas Distribution Networks

2007

109 OISD-GDN-227 Emergency Response and Preparedness in E&P Industry

2007

110 OISD-GDN-228 Selection, Training & Placement of Fire Operators in Hydrocarbon & Petrochemical Industry

2008

111 OISD-STD-230 Unlined Underground Rock Cavern Storage for Petroleum & Liquefied Petroleum Gas

2008

112 OISD-STD-231 Sucker Rod Pumping Units 2008

83

ANNEXURE-III MINUTES

STANDING COMMITTEE ON PETROLEUM & NATURAL GAS

(2010-11)

THIRTEENTH SITTING (26.7.2011)

The Committee sat on Tuesday, the 26th July, 2011 from 1400 hrs. to 1530 hrs. in

Committee Room “B”, Parliament House Annexe, New Delhi. PRESENT

Shri Aruna Kumar Vundavalli - Chairman MEMBERS Lok Sabha

2 Shri Ramesh Bais

3 Smt. Santosh Chowdhary

4 Shri Mukesh B. Gadhvi

5 Shri Dilipkumar Mansukhlal Gandhi

6 Shri Maheshwar Hazari

7 Shri Gorakh Prasad Jaiswal

8 Dr. Thokchom Meinya

9 Shri Mahabal Mishra

10 Shri K. Narayan Rao

11 Shri C.L. Ruala

12 Shir Uday Pratap Singh

Rajya Sabha 13 Shri Sillvius Condpan

14 Shri Kalraj Mishra

15 Shri Vijay Kumar Rupani

16 Shri Tapan Kumar Sen

17 Dr. Prabha Thakur

18 Shri Sabir Ali

Secretariat 1. Shri A.K. Singh - Joint Secretary

2. Smt. Anita Jain - Director

84

Representatives of the Ministry of Petroleum & Natural Gas

1. Shri G.C.Chaturvedi - Secretary

2. Shri Sudhir Bhargava - Additional Secretary

3. Shri D.N.Narasimha Raju - Joint Secretary

4. Shri L.N.Gupta - Joint Secretary

5. Shri Apurva Chandra - Joint Secretary

Representatives of Public Sector Undertakings and other organizations

1 Shri R.S. Butola - Chairman, IOCL

2 Shri A.K.Hazarika - C&MD, ONGC

3 Shri R.K. Singh - C&MD, BPCL

4 Shri N.M.Borah - C&MD, OIL

5 Shri B.C. Tripathi - C&MD, GAIL

6 Shri V.Vizia Saradhi - Director, HPCL

7 Shri R.P. Wattal - Secretary, PNGRB

8 Shri Rajesh Vedvyas - MD, IGL

9 Shri V.C. Chittoda - MD, MGL

10 Shri R.K. Dhadda - MD, RGTIL

11 Shri R.P. Sharma - President, RIL

85

12 Shri R.K. Garg - Director, PLL

13 Shri S.L. Chakravorty - ED, OISD

2. At the outset, Hon’ble Chairman welcomed the Members, representatives of the Ministry of Petroleum and Natural Gas and public undertakings to the sitting and explained the purpose of the meeting and the need for maintaining confidentiality of the proceedings of the sittings.

3. Thereafter, the representatives of the Ministry briefed the Committee on the status of

implementation of recommendations of M.B. Lal Committee constituted in the wake of security

concerns aggravated post Jaipur fire incident. The Committee then discussed various issues

related to the subject including delay in implementation of some of the recommendations of

M.B. Lal Committee which were required to be implemented immediately, delay in procurement

of items as recommended by the above Committee and functioning of the monitoring Committee

constituted for the purpose, safety measures taken by the Government at oil installations,

action taken against the officers who were charge-sheeted in the Jaipur fire accident and

compensation given to affected parties and fixing the responsibilities at high level in such cases.

4. The clarifications sought by the Members on various points related to the subject were

provided by the representatives of the Ministry. On some of the points to which the Ministry’s

officials could not readily respond, the Chairman asked them to furnish written information within

a specific time period.

5. A verbatim record of the proceedings of the sitting has been kept.

The Committee then adjourned.

86

ANNEXURE-IV

MINUTES

STANDING COMMITTEE ON PETROLEUM AND NATURAL GAS

(2011-12)

SECOND SITTING (31.10.2011)

The Committee sat on Monday, October 31, 2011 from 1500 hrs. to 1730 hrs. in

Committee Room 'C', Ground Floor, Parliament House Annexe, New Delhi. PRESENT

Shri Aruna Kumar Vundavalli - Chairman

MEMBERS

Lok Sabha

2. Shri Sudarshan Bhagat 3. Shri Dilipkumar Mansukhlal Gandhi 4. Dr. Thokchom Meina 5. Shri Mahabal Mishra 6. Shri M.B. Rajesh 7. Shri Brijbhushan Sharan Singh 8. Shri Dhananjay Singh 9. Shri Uday Pratap Singh 10. Shri C. Sivasami 11. Shri Thol Thirumaavalavan

Rajya Sabha

12. Shri Sabir Ali 13. Shri Kalraj Mishra 14. Shri Vijay Kumar Rupani 15. Shri Tapan Kumar Sen 16. Smt. Gundu Sudharani 17. Dr. Prabha Thakur 18. Prof. Ram Gopal Yadav

SECRETARIAT

1. Shri A.K. Singh - Joint Secretary 2. Smt. Anita Jain - Director 3. Shri Sanjeev Kumar Mishra - Deputy Secretary

87

Representatives of the Ministry of Petroleum & Natural Gas

1. Shri G.C.Chaturvedi - Secretary

2. Shri Sudhir Bhargava - Additional Secretary

3. Shri L.N.Gupta - Joint Secretary

4. Shri Vivek Kumar - Joint Secretary

Representatives of Public Sector Undertakings and other Organizations

1 Shri R.S. Butola - Chairman, IOCL

2 Shri S. Roy Choudhury - C&MD, HPCL

3 Shri R.K. Singh - C&MD, BPCL

4 Shri N.M.Borha - C&MD, OIL

5 Shri A.K.Hazarika - Director (Onshore), ONGC

6 Shri P. Mahajan - Director (Tech), EIL

7 Shri S. Venkataraman - Director (BD), GAIL

8 Shri Hirak Dutta - Executive Director, OISD

9 Shri S.L.Chakravarty - Director, OISD

10 Shri N.K. Khosla - Executive Director, IOCL

2. At the outset, Hon'ble Chaiman paid tribute to Late Shrimati Indira Gandhi on her death

anniversary and late Shri Silvius Condpan, a member of this Commitee from Rajya Sabha, who

passed away on 10th October,2011. The Committee passed a Condolence Resolution in his

honour. Thereafter, Hon’ble Chairman welcomed the Members, representatives of the Ministry

of Petroleum and Natural Gas and public Undertakings to the sitting.

88

3. The representatives of the Ministry briefed the Committee on the subject 'Safety of Oil

Installations' and also apprised them of the stage of implementation of recommendations of the

M.B. Lal Committee on Jaipur fire incident. The Committee discussed various issues pertaining

to the above subject and expressed unhappiness over the tardy progress made in implementing

the recommendations of M.B.Lal Committee. Other issues which came up for discussion

included putting on hold tendering process resulting in delay of procurement of safety items as

recommended by the said Committee, CVC guidelines and enquiry into single tender process

by IOC, review of OISD standards 116 and 117 particularly relating to equivalency, retroactivity

and common fire fighting facilities in a meeting despite the same notified by the OISD for

adoption and incorporation by the industry.

4. The Members registered their strong protest over circulation of unsigned note of Shri

M.B. Lal submitted to the Secretary, MOPNG, in his individual capacity despite the fact that the

recommendations of the M B Lal Committee have been accepted by the Government for

implementation. The note was in regard to expenditure on implementing Jaipur fire Committee

recommendations and the scope for optimizing costs and time.

5. The clarifications sought by the members on various points related to the subject were

provided by the representatives of the Ministry. On some of the points to which the Ministry's

officials could not readily respond, the Chairman asked them to furnish written information within

a specific time period.

6. A verbatim record of the proceedings of the sitting has been kept.

The Committee then adjourned.

89

ANNEXURE-V

MINUTES

STANDING COMMITTEE ON PETROLEUM AND NATURAL GAS (2011-12)

SEVENTH SITTING

(29.3.2012)

The Committee sat on Thursday, March 29, 2012 from 1500 hrs. to 1730 hrs. in Committee Room 'B', Parliament House Annexe, New Delhi. PRESENT

Shri Aruna Kumar Vundavalli - Chairman

Lok Sabha 2 Shri Vikrambhai Arjanbhai Madam Ahir

3. Shri Ramesh Bais

4 Shri Sudarshan Bhagat

5 Shri Sanjay Singh Chauhan

6 Shri Raosaheb Dadarao Danve

7 Shri Mukeshkumar Bheravdanji Gadhvi

8 Dr. Thokchom Meinya

9 Shri Mahabal Mishra

10 Shri Kabindra Purkayastha

11 Shri M.B. Rajesh

12 Shri C.L.Ruala

13 Shri Dhananjay Singh

14 Shri Uday Pratap Singh

90

Rajya Sabha 15 Smt. Gundu Sudharani

16 Dr. Prabha Thakur

17 Shri Sabir Ali

18 Shri Pankaj Bora

Secretariat

1. Shri A.K.Singh - Joint Secretary

2. Smt. Anita Jain - Director

3. Shri H.Ram Prakash - Deputy Secretary

Representatives of the Ministry of Petroleum & Natural Gas

1. Shri G.C.Chaturvedi - Secretary

2. Shri Sudhir Bhargava - Additional Secretary

3. Shri L.N.Gupta - Joint Secretary

4. Shri Vivek Kumar - Joint Secretary

Representatives of Public Sector Undertakings and other Organizations

1 Shri R.S. Butola - Chairman, IOCL

2 Shri S. Roy Choudhury - C&MD, HPCL

3 Shri R.K. Singh - C&MD, BPCL

4 Shri N.M.Borah - C&MD, OIL

5 Shri Hirak Dutta - Executive Director, OISD

6 Shri S.L.Chakravarty - Director, OISD

91

7 Shri Anoop Kumar - ED, HSE, ONGC

2. At the outset, Hon’ble Chairman welcomed the Members, representatives of the

Ministry of Petroleum and Natural Gas and Public Sector Undertakings to the sitting.

3. Thereafter, the Members sought clarifications on various aspects of the implementation

of M.B.Lal Committee recommendations. While deliberating on the issues, the Committee

deplored the inordinate delay and tardy progress in the implementation of safety measures in oil

installations resulting in vulnerability of thousands of workers deployed in the oil installations in

various parts of the country. The Committee also exhorted the oil companies to ensure strict

adherence to the safety guidelines prescribed by OISD.

4. Other issues which came up for discussion included putting on hold tendering process

resulting in delay of procurement of safety items as recommended by the said Committee, CVC

guidelines and enquiry into single tender process by IOC, review of OISD standards.

5. The clarifications sought by the Members on various points related to the subject were

provided by the representatives of the Ministry. On some of the points to which the Ministry's

officials could not readily respond, the Chairman asked them to furnish written information within

a specific time period.

6. A verbatim record of the proceedings of the sitting has been kept.

The Committee then adjourned.

92

ANNEXURE-VI

MINUTES

STANDING COMMITTEE ON PETROLEUM AND NATURAL GAS (2011-12)

NINTH SITTING

(16.4.2012)

The Committee sat on Monday, April 16, 2012 from 1100 hrs. to 1330 hrs. in Room No. 62, Parliament House, New Delhi. PRESENT

Shri Aruna Kumar Vundavalli - Chairman

Lok Sabha 2 Shri Ramesh Bais

3 Shri Sudarshan Bhagat

4 Smt. Santosh Chowdhary

5 Shri Kalikesh N. Singh Deo

6 Shri Mukeshkumar Bheravdanji Gadhvi

7 Shri Dilipkumar Mansukhlal Gandhi

8 Dr. Thokchom Meinya

9 Shri Mahabal Mishra

10 Shri M.B. Rajesh

11 Shri Brijbhushan Sharan Singh

12 Shri Dhananjay Singh

13 Shri Uday Pratap Singh

14 Shri C. Sivasami

93

15 Shri Thol Thirumaavalavan

Rajya Sabha

16 Smt. Gundu Sudharani

17 Dr. Prabha Thakur

18 Shri Sabir Ali

ecretariat 1. Shri A.K.Singh - Joint Secretary

2. Smt. Anita Jain - Director

3. Shri H.Ram Prakash - Deputy Secretary

Representatives of the Ministry of Petroleum & Natural Gas

1. Shri G.C.Chaturvedi - Secretary

2. Shri L.N.Gupta - Joint Secretary

3. Shri Neeraj Mittal - Joint Secretary

Representatives of Public Sector Undertakings and other Organizations 1 Shri Sudhir Vasudeva - C&MD, ONGC

2 Shri R.S. Butola - Chairman, IOCL

3 Shri S. Roy Choudhury - C&MD, HPCL

4 Shri R.K. Singh - C&MD, BPCL

5 Shri Hirak Dutta - Executive Director, OISD

6 Shri A.Mishra - Director, OISD

94

2. At the outset, Hon’ble Chairman welcomed the Members, representatives of the

Ministry of Petroleum and Natural Gas and Public Sector Undertakings to the sitting.

3. Thereafter, the Members sought clarifications on procurement of items like Rimseal

protection and other key safety items. Some Members also raised the issue of oil spill in

onshore/offshore installations and its environmental impact. The Committee also deliberated on

single tender process, functioning and administrative framework of OISD, its inspections, rules

and standards, role of PESO (Petroleum and Explosive Safety Organization) in overseeing

safety issues and increasing major and minor fire accidents in the oil installations.

4. The clarifications sought by the Members on various points related to the subject were

provided by the representatives of the Ministry. On some of the points to which the Ministry's

officials could not readily respond, the Chairman asked them to furnish written information within

a specific time period.

5. A verbatim record of the proceedings of the sitting has been kept.

The Committee then adjourned.

95

ANNEXURE-VII

MINUTES STANDING COMMITTEE ON PETROLEUM & NATURAL GAS

(2011-12) ELEVENTH SITTING

(21.05.2012)

The Committee sat on Monday the 21st May, 2012 from 1015 hrs. to 1100 hrs. in Room No ‘113’, First Floor, Parliament House Annexe, New Delhi.

PRESENT Shri Aruna Kumar Vundavalli - Chairman

MEMBERS 2 Shri Ramesh Bais

3 Shri Badruddin Ajmal

4 Shri Sanjay Singh Chauhan

5 Shri Raosaheb Dadarao Danve

6 Shri Kalikesh N. Singh Deo

7 Shri Mukeshkumar Bheravdanji Gadhvi

8 Shri Dilipkumar Mansukhlal Gandhi

9 Dr. Thokchom Meinya

10 Shri Mahabal Mishra

11 Shri C.L. Ruala

12 Shri Dhananjay Singh

13 Shri Uday Pratap Singh

14 Shri Sudarshan Bhagat

Rajya Sabha 15 Dr. Prabha Thakur

96

16 Shri Sabir Ali

17 Shri Shankarbhai N. Vegad

Secretariat

1. Shri A.K.Singh - Joint Secretary

2. Smt. Anita Jain - Director

2. At the outset, Hon’ble Chairman welcomed the Members to the sitting of the Committee.

3. Thereafter, the Committee took up for consideration the draft Report on the subject ‘Safety of Oil Installations’ and adopted the same with minor modifications.

4. The Committee authorised the Chairman to finalise the Report in the light of consequential changes arising out of the suggestions made by the Committee Members in Report and to present/lay the same in the both Houses of Parliament.

The Committee then adjourned.