MEMORANDUM

Reference No : GHSED/SGM/ME/2015/0303-78

To : HSE Heads and HSE Managers

CC : GHSE Department Heads

From : Dr. Bea Ponnudurai Date : 26th March 2015

Head, Group HSE

HSE RISK MATRIX (HSERM)

Dear All,

The PETRONAS HSE Risk Matrix (HSERM) is a risk assessment tool for determining the
significance and tolerability of risks based on the magnitude of impacts of a hazard, and
the likelihood of occurrence. It is used in conjunction with other risk assessment studies
in PETRONAS.

Presently, the HSERM exists as a “stand alone” document consisting of a matrix and
descriptors derived from PETRONAS Risk Matrix Guideline issued by Group Risk
Management, Corporate Strategy and Risk (GRM, CSR). To incorporate the HSERM into
the overall PETRONAS HSE Risk Management Framework, GHSE will include the matrix
and guidelines on its use and application in the next revision of PTS 18.04.02 “Hazards
and Effects Management Process” in 2015.

Attached please find the revised HSERM with brief guidance on its use and application
for reference in the on-going risk assessments. Minor changes that need to be noted
with regards to the previous version of the HSERM include:

 Increase in the VERY HIGH Risk Rating zone from three (3) to six (6) squares.
Hazards having the potential to cause Major Injury and/or Single Fatality have
been assigned higher severity levels.

 Replacement of “Company” with “PETRONAS”

 Revision of Severity Descriptors for P (People), E (Environment), A (Asset), and

R (Reputation) which includes the following:

a. Addition of a new category “No Treatment” Case on impact to People.

 b. Assignment of numerical values on amount of environmental spill or release
of based on API 754.

c. Change in Asset Damage values on impact to Asset.

OPU HSE Managers shall take note of the changes in HSERM and Severity Descriptors
and incorporate the same in all site-specific risk assessment activities.

Should you need further queries, please contact our personnel En Busari Jabar at
busari_jabar@petronas.com.my

Thank you.

DR. BEA PONNUDURAI

 PETRONAS HSE RISK MATRIX

1. INTRODUCTION

This document describes the PETRONAS HSE Risk Matrix (HSERM) and provide guidance on its use and
application when conducting risk assessment.

2. PETRONAS HSE RISK MATRIX (HSERM)

The PETRONAS HSERM as shown in Figure 1 below provides five (5) levels of Severity of “worst case”
Consequence of release or occurrence of hazards and five (5) levels of Likelihood of the “worst case”
Consequence occurring for each of four (4) categories, i.e. People, Environment, Assets, and
Reputation (P, E, A & R).

Figure-1: PETRONAS HSE Risk Matrix (HSERM)

1 2 3 4 5
SEVERITY Insignificant Minor Moderate Major Catastrophic
Single Multiple
Major Injury
Fatality Fatalities
Minor
People Slight Injury Permanent
Injury Major Health Permanent
Total
Effects* Total Disability*
Disability*
Consequence Minor Moderate Major
Environment Slight Impact Massive Impact
Impact Impact Impact
Minor Major Extensive
Asset Slight Damage Local Damage
Damage Damage Damage
Major Major
Limited Considerable
Reputation Slight Impact National International
Impact Impact
Impact Impact
Incident has
E occurred several
E1 E2 E3 E4 E5
Almost Certain times per year in
OPU
Incident has
D occurred in OPU; or
Likely more than once per
D1 D2 D3 D4 D5
year in PETRONAS
LIKELIHOOD

Incident has
occurred in
C PETRONAS; or more C4
C1 C2 C3 C5
Possible than once per year
in industry world
wide
Incident has
B
Unlikely
occurred in industry, B1 B2 B3 B4 B5
world-wide
A Never heard of in
Remotely likely industry world-wide A1 A2 A3 A4 A5
to happen but could occur
* For chronic health effects

Details of the Severity Descriptors for the Consequences for P, A, E & R are shown in Section 4 of this
document.

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 PETRONAS HSE RISK MATRIX

3. APPLICATION OF HSE RISK MATRIX

3.1 Determination of Risk Rating

The HSERM is applied to establish HSE Risk Rating and is used in conjunction with various HEMP
tools such as HAZID (Hazard Identification), HAZOP (Hazards and Operability), HER (Hazards and
Effects Register), HRA (Health Risk Assessment), CHRA (Chemical Health Risk Assessment), EAIA
(Environment Aspects and Impacts Assessment), EIA (Environmental Impact Assessment), P-ALS
(PETRONAS Asset Life Study), P- IPF(PETRONAS Instrumented Protective Function) Study, PRBI
(PETRONAS Risk-Based Inspection), ELSOR (Electrical Safety and Operability Review) and other
risk assessment studies in PETRONAS.

Risks associated with hazards are evaluated in terms of Severity of Consequence (worst case)
and Likelihood of the worst case consequence (historical) from the X and Y axes. The intersect
of the Consequence and Likelihood values represents the Risk Rating i.e. LOW, MEDIUM, HIGH
or VERY HIGH, for the hazard.

The highest Risk Ratings amongst the P, E, A & R categories represents the overall Risk Rating
for the hazard. If more than one category have the same highest risk rating for the same hazard,
then both shall be mentioned. The steps to determine Risk Rating are shown in Figure 2 below.

Figure-2: Illustration of HSE Risk Matrix Application

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 PETRONAS HSE RISK MATRIX

3.3 Risk Rating and Required Intervention

Based on the Risk Rating determined for the hazard, tolerability of the risk and required
intervention within PETRONAS shall be established as shown in Table 1 below:

Table-1 : Risk Rating and Required Intervention

RISK RATING INTERVENTION

- Risk is tolerable
- Monitor at operational level using procedure/appropriate internal
LOW
control as per HSEMS
- Take corrective action according to availability of resources

- Risk is tolerable if supported by ALARP demonstration

MEDIUM - Undertake control evaluation
- Monitor using procedure or appropriate internal control as per HSEMS

- Risk is tolerable if supported by ALARP demonstration

- Undertake risk reduction by applying appropriate control and recovery
HIGH barriers
- Review and approval of ALARP demonstration by Facility Head/Project
Head and Senior management with escalation to Business Head

- Risk is not tolerable.

VERY HIGH - Mitigate the risk by incorporation of control and recovery action(s) to
reduce the risk rating to HIGH or below

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 PETRONAS HSE RISK MATRIX

4. SEVERITY DESCRIPTORS FOR SEQUENCE

4.1 Consequence on People

SEVERITY DESCRIPTION

Slight Injury  “No Treatment” Case or First Aid Case.

1
or Health  Occupational Illnesses that result in noticeable discomfort, minor
Insignificant Effect irritation or transient effects after exposure stops.

 Medical Treatment Case.

 Lost Workday Case or Restricted Work Case, where the duration
Minor Injury equals or less than 4 calendar days.
2
or Health  Occupational Illnesses with reversible health effects such as food
Minor Effect poisoning and acute dermatitis.
 Positive biological/biological effect monitoring result without
permanent effect to health.
 Lost Workday Case or Restricted Work Case, where the duration
exceeds 4 calendar days.
3 Major Injury  Injury which result in Permanent Partial Disability.
or Health  Occupational illnesses with irreversible health effects which result
Moderate Effect in Permanent Partial Disability such as occupational noise induced
hearing loss, chronic back disorder or repetitive strain injury.

 Fatality due to injury or occupational illness.

Single
 Injury which result in Permanent Total Disability.
4 Fatality or
Permanent  Occupational illness including cancer with irreversible health
Major Total effect which result in Permanent Total Disability such as
Disability asbestosis, silicosis and heart or kidney failure due to chemical
exposure.

 Fatalities due to injury or occupational illness.

Multiple*
 Occupational illnesses** including cancer with irreversible health
5 Fatalities or
effect which result in Permanent Total Disability such as
Permanent
Catastrophic asbestosis, silicosis and heart or kidney failure due to chemical
Total
exposure.
Disability

* occurrence of multiple fatalities or Permanent Total Disabilities caused by one single incident.
** occupational illnesses including cancer to affected workers exposed to similar hazard in the same Operating
Unit.

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 PETRONAS HSE RISK MATRIX

4.2 Consequence on Environment

SEVERITY DESCRIPTION
Release(See Note 1) equal to or below Tier 2 Material
Release Threshold Quantities (See Notes 2 and 3) not
Slight resulting in consequences described in Major 4 – 5.
1 adverse Examples:
environ-
Insignificant  Spill ≤ 1 bbl onto soil. Staining on unpaved ground or stressed
mental
vegetation observed.
effect
 Gaseous release of estimated less than 20 kg of ammonia into
ambient air.

 Release above Tier 2 Material Release Threshold Quantities but

equal to or below Tier 1 Material Release Threshold Quantities (See
Notes 2 and 3)
; or
 Breach of prescribed Company/Other standard limits, if any;
Minor Not resulting in consequences described in Major 4 – 5.
2 adverse
Examples:
environ-
Minor mental  Spill of 6 bbl diesel onto soil. Staining on unpaved ground or
effect stressed vegetation observed.
 Gaseous release of estimated 2 kg of hydrogen sulfide into
ambient air.
 Not meeting company limit for boundary noise, or air emission, or
effluent discharge.
 Release above Tier 1 Material Release Threshold Quantities (See Notes
2 and 3)
; or
 Non-compliance to regulatory limits(See Note 4);
Not resulting in consequences described in Major 4 – 5.
Examples:

Moderate  Oil leakage > 7 bbl resulting in soil and groundwater contamination
adverse that does not affect beneficial uses of soil and groundwater such
3 as potable water supply.
environ-
Moderate mental  Spill of condensate of estimated 8 bbl into adjacent stream
effect resulting in fishkill, but no significant disruption or loss to beneficial
uses of the stream, or loss of sensitive or protected species.
 Gaseous release of estimated 1,000 kg of natural gas that does not
cause disruption or loss of beneficial uses of the environment or
public receptors.
 Breach of regulatory limit for boundary noise, or air emission, or
effluent discharge.

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 PETRONAS HSE RISK MATRIX

SEVERITY DESCRIPTION
Release or non-compliance to regulatory limits which results in
significant disruption of or impairment to beneficial uses of the
environment and/or to public receptors.
Examples:
 Oil spill reaching the local coastline causing disruption to
Major commercial fish farming and other water recreational activities.
4 adverse
environ-  Surface water contamination causing domestic and commercial
Major mental water supply disruption to regional population and business
effect activities over several days.
 Groundwater contamination from an underground tank of a petrol
station affecting adjacent community drinking water well.
 Gaseous release of hydrogen sulfide at concentrations exceeding
regulatory limits along the facility boundary resulting in confirmed
cases of community seeking medical treatment.
Release or non-compliance to regulatory limits over designated areas
of ecological importance or an extensive area which results in:
 Significant loss of beneficial uses of the environment and/or loss
of public receptors; or
 Loss of rare, endangered, threatened and endemic species.
Massive Examples:
5 environ-  Crude oil spill affecting a large area of sensitive mangrove
Catastrophic mental estuarine with loss of protected species or critical habitat in that
effect area.
 Contamination of surface water causing loss of sole water supply
source for community and business activity over extended period
or inability to sustain beneficial use of environment.
 Gaseous release of natural gas and explosion resulting in
confirmed cases of death in adjacent residential community.
Notes:
1. Release – Includes gaseous release into the atmosphere, and/or spill onto or into soil and/or water.
2. Material Release Threshold Quantities per API Recommended Practice 754
3. Use barrels (bbl) for liquids, or kilograms (kg) for gases or solids. Conversion between barrels and liters for
liquids: 1 bbl = 159 liters
4. Non-compliance to regulatory standards/limits, with respect to but not limited to air emission, effluent
discharge, boundary noise, objectionable odour, heat or vibration. Where host country regulatory
requirements are not available, then Company standards/limits will apply, if available.

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 PETRONAS HSE RISK MATRIX

Definitions/Explanation:

Beneficial Uses Means uses of the environment or any element or segment of the
environment that is conducive to public health, welfare or safety and which
requires protection from the effects of wastes, discharges, emissions and
deposits.
Covers the uses of land, water and/or other natural resources including but
not limited to:
 Agriculture/aquaculture – Farming, horticulture and commercial
production of aquatic animals;
 Public water supply – Source water for community, or individual water
supply systems, including, but not limited to, drinking water supply
delivered through community water supply systems;
 Industrial water supply – Water for industry, including secondary industry
and a mining or petroleum activity, and for other industry uses;
 Wildlife habitat in areas of ecological importance – Support wildlife
habitat and ecosystems including, but not limited to, the survival and
enhancement of plant and animal species in areas of ecological
importance;
 Recreation – Parks, green areas and water bodies used for sports,
boating, recreational fishing, swimming and other social activities;
 Culture, religion and heritage – Areas with high archaeological and
historical value, aboriginal/native traditional or customary land, burial
grounds, houses of worship or land reserved for spiritual/religious
activities.

Company/Other Means standard limits/targets set internally by PETRONAS or its respective

standard limits OPUs, and/or those set by third party (eg. effluent quality acceptance criteria
set by a third party effluent treatment facility). This excludes standard limits
set by regulatory authorities.
Public receptors Include offsite residences, institutions (e.g. schools, hospitals), industrial,
commercial, and office buildings, parks or recreational areas where members
of the public could potentially be or are exposed to environmental pollutants.

Designated Means listed, gazetted, recognized, identified or protected by law or by

relevant authorities.
Disruption to public May include disruption or interruption resulting in community evacuation, or
receptors injury or illness from exposure to environmental pollutants.

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 PETRONAS HSE RISK MATRIX

Means clearly defined geographical space, recognized, dedicated and

Area of ecological
managed, through legal or other effective means, to achieve the long-term
importance
conservation of nature with associated ecosystem services and cultural values
This may include:
 National and State parks, nature reserves or conservation areas (eg.
wildlife reserves, sanctuaries, marine parks, and forest reserves);
 UNESCO Biosphere Reserve and Heritage Site;
 Areas with restricted range or endemic species, and migratory and
congregatory species.
 Wetlands that have been designated or recognized as being regional,
national and international importance.

Includes listed species, for example, according to IUCN Red List of Threatened
Rare, endangered, Species (critically endangered or endangered species or vulnerable), or
threatened and protected under statutory act.
endemic species

3.3 Consequence on Asset

SEVERITY DESCRIPTION

1 Slight
 Direct damage cost less than USD25,000
Insignificant Damage

Minor
2 Minor  Direct damage cost from USD25,000 to USD 100,000
Damage

3 Local
 Direct damage cost from USD 100,001 to 1,000,000
Moderate Damage

Major
4 Major  Direct damage cost from USD1,000,001 to USD10,000,000
Damage

5 Extensive  Direct damage in excess of USD10,000,000*

Catastrophic Damage

* Based on benchmarking with IOC. Newfield specifies > USD 2M, Shell and CCPS specify > USD 10M, while
EPMI uses > USD 30M.

Direct Cost: Cost directly attributed to the fire and/or explosion, such as the replacement value of equipment lost,
product loss, cost of repairs, cleanup, emergency response and/or fines. Direct cost does not include indirect
costs, such as business opportunity losses, loss of profits due to equipment outages, cost of obtaining or operating
temporary facilities or cost of obtaining replacement products to meet customer demand

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 PETRONAS HSE RISK MATRIX

3.4 Consequence for Reputation

Severity Definition

Slight Slight Consequence

1 Insignificant
Consequence  Public awareness may exist, but there is no public concern

Limited Consequence
Limited  Local public concern or complaints
2 Minor
Consequence  Local media and/or local political attention with potentially
negative consequence for company operations

Considerable Consequence
 Regional public concern. Extensive adverse attention in local
3 Considerable media
Moderate Consequence  National media and/or regional political attention resulting in
negative consequence on company operations
 Adverse stance of local government and/or action groups

National Consequence
 National public concern. Extensive adverse attention in the
Major national media
4 Major National
Consequence  Regional/national policies with potentially restrictive measures
and/or consequence on grant of licences**
 Mobilisation of pressure or action groups

International consequence
 International public attention. Extensive adverse attention in
Major
international media
5 Catastrophic International
Consequence  National/international policies with potentially severe
consequence on access to new areas, grants of licences** and/or
tax legislation

** Withdrawal of existing license or rejection of new license to operate

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