Key Initiatives | Hess Corporation
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Key Initiatives

 

We continue to evolve and advance our management systems in a manner that aligns with Hess’ portfolio and organizational structure. As part of this process, in 2018 we reorganized into teams of functional leaders (e.g., Environment, Health and Safety (EHS); Wells; Human Resources; Supply Chain), which helps us continue to improve oversight and assurance across the company and provide expertise in key functional areas within each asset. The Head of each functional area is responsible for overseeing activities in that area across the company, verifying that relevant standards are applied as appropriate and working with each asset to optimize safety, quality, delivery and cost.

 

The Heads of each function are supported by technical authorities (TAs) – many of whom are embedded directly into our assets. Together, these individuals form the “Heads of” and Technical Authority (HTA) Network, which supports operations across the company. This group meets monthly to support enterprisewide initiatives, promote transparency of activities and optimize synergies across our functions and assets.

 

In 2019, under the leadership of the HTA Network, we completed development of the Hess Operational Management System (HOMS), a single, enterprisewide system that houses and integrates the various standards, procedures and other governance documents in use throughout our operations. HOMS establishes a common operational framework outlining how we aim to address risk management, process safety, environmental responsibility and management of personnel and contractors, as well as the efficient and reliable design and operation of our assets. A HOMS manual supports HOMS implementation and provides direction on how the management system guides and integrates our work across functions and locations. Ultimately, we expect that HOMS will help us to manage risks associated with a changing organization; coordinate technical expertise, standards and processes across the organization; and align asset-level operations with enterprisewide corporate governance documents and business priorities.

 

Ongoing assurance and continuous improvement will continue to be central aspects of how we manage our organization, including through audits and assessments of our implementation of and compliance with HOMS. Key operations and processes will be regularly reviewed based on assessed risk and compliance requirements.

 

In 2020, we are streamlining Hess’ enterprise- and asset-level safety and operational standards, procedures and other governance documents as part of our implementation of HOMS.

EHS Global Standards

For many years, our Environment, Health, Safety and Social Responsibility (EHS & SR) Management System provided a framework for continuous improvement in enhancing operational excellence, tracking key performance metrics, managing risk and maintaining regulatory compliance. And over the past five years, we have been developing and implementing an enhanced set of EHS standards across the company to further improve operational effectiveness and EHS performance. Our EHS & SR Management System, and therefore the process of developing enhanced standards, has now been integrated into the Hess Operational Management System. As with HOMS overall, the goals of our EHS standards update project have been to formalize expectations and accountabilities across the company and support a globally consistent approach to operational excellence. By documenting our expectations in the form of enterprise-level standards that are backed up by supporting procedures developed at the regional and asset levels, as well as regular compliance assessments, we aim to strengthen assurance across the enterprise. The updated EHS standards, like HOMS overall, incorporate Lean principles, including standardized work processes to gain efficiency; tools for incorporating lessons learned; and metrics and mandatory review processes to drive accountability.

 

Following a risk-based approach, we prioritized the order of development and implementation of enterprisewide EHS standards into three phases, as shown in the graphic below.

 

Through the implementation process, we require our assets to complete desktop gap assessments in which they compare their current documented practices with the expectations of the enhanced standards and develop actions to close any gaps identified.

 

Due to the necessary migration of the EHS standards from our prior EHS & SR management system to HOMS, we have extended the deadline for full implementation of the phase III standards (and any other standard with an approved delay dispensation) from 2020 to 2021. Until those standards are fully implemented, our operations will continue to use existing asset-level guidance documents for managing relevant EHS issues. Also as part of the HOMS process, all standards will be reassessed on a regular three to five year review cycle, which will include review by members of the HTA Network. Review of the EHS standards will begin in 2020.

Reliability Operations

In 2019, we completed the transformation to a Reliability Operations model across our operated assets. This program, initiated in the Bakken in 2015, is designed to improve equipment reliability through a focused cultural shift that promotes greater ownership and proactive maintenance of equipment. To support this, we have merged our conventional maintenance and production operations’ groups to form a new more aligned structure, in which everyone from the frontline workers to senior management plays a role in maintaining and improving how we operate and helping to ensure conformance to expectations and enterprisewide standards. Through this effort, we aim to maximize efficiency, reliability, integrity and surveillance; optimize production and costs; and drive continuous improvement, including improvement to EHS performance.

 

Reliability Operations is the culmination of various improvement initiatives and approaches we have undertaken, including Operations of the Future, through which we reorganized management structures and processes to better focus the production organization on working in service of our colleagues in the field. It also integrates Lean principles, such as maximizing flows of information and work across functions and teams.

 

Through these efforts, we have seen improvements in efficiency and performance trends, including reduced unplanned work and deferrals, fewer unexpected equipment failures, reduced EHS incidents and lower production costs, all while maximizing production.

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