Risk Matters Weekly: Exploring Hidden Risks in Facility Acquisitions

Where are the Gaps?

Whether you are just looking at acquiring a new asset or you’ve recently brought one into your company it is important to quickly understand the risk that comes with operating the facility.

Are all the relevant safety threats being well managed or is it a ticking time bomb ready to put your name at the top of everyone’s news feed with a major incident?

Is your risk tolerance the same as the selling company? Not likely. This can be especially true for smaller companies who are sold to larger ones. The philosophy around safe operations is rarely the same and even in large companies, aligning the approach is critical to avoiding an unsafe day.

What Should You Be Asking?

Did the last owner do risk assessments?
Where is the documentation?
Was it a thorough and complete analysis?
Are all critical safeguards identified and prioritized?
Have all critical recommendations been implemented?

Risk Management is Serious Business

The 2005 explosion at the Texas City is a powerful example of facility acquisitions and major incidents. Fifteen lives were lost in the explosion and many lives were changed during the well-known process safety incident. At the time of the incident the facility was in the BP portfolio for just 6 short years. Even a company with a wealth of resources and robust PSM programs can struggle to change culture and improve on safety programs that quickly.

In the reports following the incident it was cited that the facility was under BP ownership for a short time with the 1999 acquisition. Regardless, BP was the headline name and faced the brunt of 300 OSHA safety violations and a $21M fine, the largest fine in OSHA history at the time. It was later sold to Marathon Petroleum in 2013, 8 years after the incident.

READ MORE HERE

The intelligence You Need to Make the Right Choice

Using analytics and industry data to ensure critical threats are addressed gives you and all stakeholders the peace of mind to know without a doubt that all critical threats are being managed.

Risk Alive® holds the world’s largest collection of PHA and risk data and has the advanced tools and technology to analyze it effectively and efficiently. Never before has this been possible but now you can access huge collections of data for facilities of all types from refineries to gas plants, fertilizer production to French fry factories to identify common threats, mitigations and the best strategies to protect your new investment.