The Formation of the ExxonMobil Corporation

ExxonMobil Corporation was formed in year 1999 after the merger of two major oil companies, Exxon and Mobil. Both Exxon and Mobil were descendants of the John D. Rockefeller Corporation, Standard Oil which was established in 1870. Its headquarters are located in Irving, Texas. ExxonMobil is one of the largest publicly traded companies in the world, they have been ranked either no.1 or no.2 for the past 5 years. However they are currently 4th in the ranking according to Forbes Global 2000 [1]. Today, Exxon Mobil also is the world's largest refiner and marketer of petroleum products. They operate in most of the world's countries and well known by their familiar brand names: Exxon, Esso and Mobil. This report will be covering the Exxon Mobil company background and study about the oil refinery industrial processes and operations in the company. Apart from that, research against the risk and its consequences of all the hazards of the oil spill disaster. In the other hand, to study the essential improvement changes in the management systems so that to prevent the disaster happening again.

(1) Aims and Objectives of Exxon Mobil Corporation

Exxon Mobil Corporation is committed to being the world's premier petroleum and petrochemical company. They aims to continuously achieve superior financial and operating results while remain to the highest standards of business conduct [1]. Exxon Mobil Corporation is focusing on its corporate governance, because they believe good governance is essential for creating economic climate beneficial to large scale investments. There are 4 important components in their corporate governance which is Management systems, Standards of Business Conduct, Control Systems and National Content Development. [2] Management Systems - A good management systems would facilitate the operation and work efficiently of one company. Exxon Mobil Corporation has complies with all applicable laws and regulations, and maintain high standards of the laws and regulations which do not exist. They are also committed to high ethical standards, legal compliance, and integrity which is reflected in their global policies and practices. With the existing management systems, it is enable Exxon Mobil to comply the new regulations efficiently and providing them with a competitive advantage. Standards of Business - No one at the company has the authority to make exceptions waivers with respect to compliance with the standards. The Standard of Business consists of guiding principles, sixteen foundation policies, as well as open-door communication procedures. The Exxon Mobil are committed their shareholders to be rewarded with superior return. They are also committed to provide high quality products and services at competitive prices to customer without changing customer preference. ExxonMobil will continue hire and retain the most qualified employee available and maximize their opportunities for success through training and development. In the other hand, ExxonMobil commit the communities that will maintain high ethical standards, obey all applicable laws, rules, and regulations, and respect local and national cultures. Other than that, ExxonMobil are dedicated to running safe and environmentally responsible operations. Control Systems - Operations integrity Management Systems (OIMS) was introduced in 1992, it is specially designed to identify hazards and manage risks inherent to the operations and associated with the full-life cycle of projects. With the OIMS, industry-leading lost-time incident rates have been significantly reduced. Risks to the environment have been reduced, with a remarkable decline in marine spills and continuing reductions in emission. The overall effectiveness of OIMS is evaluated every five years for improvement purpose. National Content Development - Oil and gas operation able to contribute to the economic growth of a local area, region, or nation. ExxonMobil's national content development strategy helps to enhancing the economic and social opportunities. The employment of nationals is a key component of the ExxonMobil's national content strategy. ExxonMobil also focuses on training and educating to the national employees, contractors, and suppliers. They are focus on transferring skills and knowledge as well. Purchasing local goods and services will be another target on their strategy. Exxon Mobil is still able to sustain its business with the disciplined approach and long-standing commitment to its corporate during the global recession of 2009.

(2) Oil and Refinery Industrial Processes and Operations

Crude oil is a mixture of many hydrocarbons compounds and relatively small quantities of other materials such as oxygen, nitrogen, sulphur, salt and water. It has to be refined before it can be used for fuel [3]. An oil refinery or petroleum refining processes are those chemical engineering processes mix with other petroleum refineries facilities to transform crude oil into useful products such as liquefied petroleum gas (LPG), gasoline or petrol, kerosene, jet fuel, diesel oil and fuel oils. [4] All refineries perform three basic steps: -Separation (fractional distillation) -Conversion (Cracking and rearranging the molecules) -Purification Diagram 2.0 Refining Process in Antwerp, Belgium Refinery [5] Below are one of the refining processes and operations from ExxonMobil Refinery plant [6]: Step 1: Separation - Every refinery begins with the separation of crude oil into different fractions by distillation. The refinery receives its raw material through the pipe line. The crude oil is transferred into atmospheric distillation tower where it is heated and then separated into its different fractions. The products from the distillation tower range from gases at the top to very heavy, viscous liquids at the bottom. The heaviest residue is redistilled in the vacuum distillation unit and processed to make bitumen, heavy fuels. Step 2: Conversion - is a very important processes to convert low valued heavy oil into high valued petrol. It is a process to change the size and/or structure of hydrocarbon molecules. These different fractions from distillation are then desulfurized and stripped of various unwanted substances. Conversion processes include decomposition (dividing) by thermal and catalytic cracking; Unification (combining) through alkylation and polymerization; and Alteration (rearranging) with isomerization and catalytic reforming [7]. Step 3: Purification - The different products from conversion process are brought up to the required specification through a series of subsequent treatment processes. This process is done by Hydro treating. In Hydro treating, unfinished products are contacted with hydrogen under heat and high pressure in the presence of a catalyst, producing hydrogen sulphide and desulphurised product [8]. In the Exxon Mobil's Rotterdam Refinery plant, coking unit - flexicoker which was constructed in the mid eighties is using for converting the residual oil from vacuum or atmospheric distillation unit into petroleum coke as well as naphtha and diesel oil. Flexicoking is a process to convert heavy oil fractions into lighter fractions. The flexicoker is fed with the heavy oil residues or fraction from the vacuum distillation. The heavy residues are then converted at very high temperatures in the flexicoker into 70% light oil products and cokes. ExxonMobil would use these cokes to heat the different production processes. The remaining of very small quantity of coke is used in the cement industry. [6]

(3) Risks in all areas that lead to the accident

In year 1989, March 24 midnight, a serious oil spill was occurred in Prince William Sound, Alaska. There are several risks was found that lead the Exxon Valdez's oil spill event from happening. According to the accident investigation reported by The National Transportation Safety Board, they are finalised and determined five possible causes of the grounding as below [9]: Firstly, it was found that the third mate failed to properly manoeuvre the vessel, probably due to fatigue and excessive workload. At the time of the grounding, third mate just could have had 5 or 6 hours sleep in the previous 24 hours working. Regardless, he had had a physically demanding and stressful day, and he was working beyond his normal watch period. The third mate's navigation tasks for starting the turn involved navigating the tanker in a high risk situation. Secondly, the master was possibly impaired with the alcohol and he had failed to provide a proper navigation watch. A blood test showed alcohol in the master's blood several hours after the accident but he had denied that he was not impaired by alcohol [10]. During 1985, the master was instructed underwent treatment because his job performance is unsatisfactory owing to the perceived use of alcohol. He was supposed attending treatment program at the hospital but this recommended outpatient treatment program was not followed and monitored by management. Thirdly, Exxon Shipping Company failed to supervise and control the master. Besides that, ExxonMobil also failed to provide a rested and sufficient crew for the Exxon Valdez. Exxon corporate management demonstrated inadequate knowledge of and concern about the seriousness of having an alcohol-impaired master. Exxon should have removed the master from seagoing employment until there was proof that he had his alcohol problem under control. In the other hand, Exxon Valdez was operated with a reduced crew complement. The number of unlicensed crewmembers in the deck department was not sufficient to provide uninterrupted watch. Additionally, the U.S. Coast Guard had failed to provide an effective vessel traffic system. Vessel Traffic Center (VTC) watchstander could tracked the Exxon Valdez was farther 7.7 miles from the traffic lane if they set a lower range scale on the master radar console. Used of the higher range scale, VTC watchstander might not noticed the smaller course and speed change of vessel. Thus, accuracy of the radar tracking was reduced. Other than that, supervision of the VTC was adversely affected after the man power was reduced. Lastly, Effective pilot and escort services were lacking. The master only received verbal information about ice report from the pilot, and he had no choice to leave the port as tug boards were alongside and the pilot was on board already. Based on the statement above, we can see that all the risks is come from human-error or human's attitude and these unfortunate event had caused the ever largest human-caused disaster to the environment.

(4) Consequences of all the effects of the accident

In year 1989, the happening event bring a lot of aftermath to their country comprise the harmed to communities, environments, marine mammals, birds, fishes, as well as economic effects. Marine mammals, fishes and birds died in the days immediately after the oil spill. According to BBC News, below are estimated death's figure of marine mammals, fishes and birds: [11] Seabirds Sea otters Harbor seals Bald eagles Killer whales Salmon and herring 250000 2800 300 250 22 unknown After the spill, we can obviously see that reduction in population of various ocean animals, stunted development in pink salmon populations. Meanwhile, larger marine mammals and ducks suffered ill effects because their prey was contaminated. A decade later, the ecosystem still suffers as the contamination still existed in beaches, national parks and designated wilderness. Evidence for toxic of hydrocarbon exposure can be seen from the persist contamination of mussel beds [12]. According to previous study, toxicity of the oil spill will remained for a decade or more due the oil was segregate by the wave action, light and bacteria was inhibited. [13] The disaster also brings lasting harm to local communities as subsistence harvests of fish and wildlife substantially declined by Alaska Native communities after the spill. Other than that, the commercial for salmon and herring fisheries were adversely affected. It was also affected the human health as 20 communities have had major social and psychological impact like depression and Post-Traumatic Stress Disorder [13]. Economic always will have negative impacts after any disaster. For the Exxon Valdez oil spill case, it caused the economic effect in term of cleanup expenses, natural resource damages and the various economic losses incurred by the affected community or individuals [14]. We can't deny that the oil spill had brought a lot negative impacts especially to environment but sometimes we are underestimated the consequences hazards of this disaster. The environmental consequences may went far serious than we thought. [15]

(5) Improvement in the management systems

Improvements are always needed to against the disaster. Exxon Mobil has put a lot of effort to enhance the management system to prevent another Exxon Valdez from happening. According to the previous study on risk, third mate and the master was the person that makes the accident happen. At the end, Exxon has implemented Operation Integrity Management System (OIMS) to addresses all aspects of managing safety, health, security, environment and social risks as well. There are 11 important elements in OIMS [16] Diagram 5.0 Operation Integrity Management System (OIMS) - 11 elements from Exxon [16] Risks of safety, health, environmental and security can be reduced through the risk assessment and management in OIMS systems. In the risk management system, hazards are able to identify easily, so that prevention can be take place immediately. For this reason, Exxon Mobil has organized drug and alcohol testing programs for safety sensitive positions. Other than that, they are restricted safety-sensitive positions to employees with no history of substance abuse. Additionally, employees training issue. All company's must threat the training period of the newer employees as a very seriously event, this will improve the knowledge and management skill of the employees to become a successful workers no matter faces any difficulties and challenges. Much of the safety trainings must be provided to prevent any unwanted events. It's to let the workers familiar with the safety issues and take precautions always. At last, Exxon Mobil has implemented and strengthened training programs for vessel captains and pilots to provide more efficient responsibility. A specially trained and experience pilots required onboard the ship for the entire crossing through the Sound. Improvement in operation and maintenance is needed to ensure and monitor the status of compliance with regulations and responsible standards. In order to meet the requirement, ExxonMobil has improved the procedures through this system. Then make sure the structured inspection and maintenance programs are implemented well according to parameters and regulations. ExxonMobil also set up a department to investigate and analysis the incident and to ensure processes are in place for addressing and sharing learning from company and industry incidents. With the effectiveness of this system, they able to track previous reported incidents and take corrective action and prevent it happen again. As example, applied new technology in order to improve vessel navigation system and ensure the integrity of oil containment systems. [17] Based on the study above, Improvement still can be implemented by Exxon Mobil, example using double bottom and double hull for all the tankers. Referring to case incident in the Lake Maracaibo Channel in Venezuela, can be said that double hull tanker able to prevent or reduce oil spill [18].

Conclusion

Exxon Valdez oil spill disaster, the main reason led to this accident was the negligence of the management department and irresponsibility of the onboard officer. Owing to deficiency of safety and operations knowledge of employer and employees, contributing to the overwhelming accident that making huge damage to the environment and marine mammals. From this report, we learnt that the management of company plays a significant role at all fields including safety and health. Company management must always put their efforts to control all the risks and also benefits of employees. Some improvements have to be taken and monitor and review it periodically. All the oil and petroleum companies should take this tragedy as a remembrance and not forget it and 100% eradicating it from our domestic life on nowadays and also in future. (2755 words)

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