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Cost of a fatality at Oil and Gas facility

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Cost of a fatality at Oil and Gas facility

It is a sad fact that working on any rig is a dangerous vocation, and sometimes accidents can happen. When these incidents occur, they can sometimes result in the loss of life. A fatality is a very sad affair and completely changes the lives of those involved.

There are so many repercussions and variables that will affect the drilling company after the incident. Of course, one of the most prevalent would be the loss of reputation for the company involved. Although there is not a finite value that can be attached to a reputation, there are losses of revenue that are calculable. This loss of reputation is the same as losing trust in the company which can translate into a few scenarios. One scenario is the potential loss of any chance of a contract renewal. Repeat clients, need to know that they are dealing with people they can trust, and that past results that are desirable can be repeated. Any event that is not desirable is difficult to forget or set aside. Also, instead of a loss of renewal, there can be an outright cancellation of an already existing contract. This can be disastrous and very difficult to come back from. Any costs that have already been implemented are impossible to recover and will make it incredibly difficult to gain future contracts from other contracts.

A fatality will also result in an investigation. Whilst on the surface, it can be difficult to understand the costs entailed with an investigation, they are there. An investigation would usually call for drilling and production to stop, which is incredibly costly as running costs are still accumulating, with nothing coming out to profit from. All staffing costs and energy costs still need to be paid, yet the time can be classified as non-productive time. Non-productive time can be costly as it alters any statistics and data that are recorded i.e. average speed of production which can reflect badly on you when acquiring new contracts and clients.

In a US study in 2012, a study found that a non-productive workday costs on average $200,000 a day. An incident can require more than a day of stopped production, so a five-day week of no production is $1 million before even considering other costs such as insurance or the cost of any lost equipment.

After a serious incident, it is recommended that time is taken to undertake your own investigation, and this can incur costs as it may be pertinent to consult different experts for ideas for changes to reduce the risk of the same incident happening again. These experts will be costly, but necessary not only to move on safely but to also use as evidence to future clients that areas of weakness have been strengthened.

Compensation may be required on a personal level for any private individuals such as certain workers or family members affected by the incidents.

It is much more prudent to have a very sophisticated security and surveillance camera system in place to reduce the risk of loss of life in the first instance. A CCTV surveillance system, acquired from a digital surveillance specialist such as Sharpeagle Technology, can alleviate the need for many of the costs, as the chances of a serious incident are heavily reduced. The forklift camera system, from Sharpeagle, is incredibly useful in stopping any deaths from collisions from vehicles or forklifts. But, if a serious incident does occur, having such measures as SharpEagle’s Explosion proof camera system can help to not only prevent incidents but to also learn from any incident has is unavoidable. This is incredibly useful as the CCTV system will survive any explosion, and can provide answers without an extensive investigation that can needlessly stop production and waste precious time and money.

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