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There is no room for mistakes in the oil and gas industry today – Investments must be placed in the right area since day one. This statement is true during the design-phase and operations and maintenance phase. It is no big news to anyone that margins are much tighter and the era of easy oil and gas production is gone. With cost escalating over the past 10 years, and expected to continue in this trend for the upcoming 10 years, National and International Oil and Gas companies must understand the implications of decisions to the future Operational Expenditure.
Wrong decisions during the design-phase will impact the operability of the asset and, by extension, the productivity for its remaining life. Conversely, if you are already operating an oil and gas asset, given the thousands of equipment, pipes and systems, which one do you prioritise?
Allianz reports the main causes of business interruption losses in recent years have been fire and explosions. The obvious follow-up question is Why? Because of hydrocarbons leaks related to maintenance problems or faulty equipment. So, understanding the “what, when and how” is vital to ensure safe, reliable and optimum production rates.
This when Asset Performance Management (APM) comes to picture. Asset Management Performance is defined as (by Gartner):
“Asset performance management (APM) encompasses the capabilities of data capture, integration, visualization and analytics tied together for the explicit purpose of improving the reliability and availability of physical assets. APM includes the concepts of condition monitoring, predictive forecasting and reliability-centred maintenance (RCM).”
APM ensures that performance is optimum and considered throughout the entire asset lifecycle.
Let’s explore two scenarios:
- Greenfield, starting a new project
- Brownfield, what do I do with an existing asset
What to do if I am starting a project today?
The degree of freedom in the Operations & Maintenance stage is very limited as the project evolves during the design-phase. Thus, as mentioned in many posts in this blog, RAM analysis is a vital step in the development of capital projects in the oil and gas industry. Most NOCs and IOCs are running Performance Forecasting studies (i.e. RAM analysis) – DNV, for example, has performed over the last 20 years more than 1300 projects related to RAM analysis:
Projects per country
What most of these companies are missing out is the opportunity to move information acquired during the project stage to Operations and Maintenance phase. Our experience shows that the companies performing in top percentile of production efficiency and availability are those that are empowered by the decision-making support of Operational RAM analysis, strong Integrity Management systems and Evergreen models.
Integrity Management efforts should also start as early as possible in the project. In this case, it is about trying to “design out” problems associated with internal corrosion in the process vessels and pipework. What is the best strategy of, for example, using Corrosion Resistant Alloys (CRA) aiming at reducing inspection and replacement over the asset lifetime will offset these higher costs?
The focus of performing these techniques at the design-phase must be maintenance of information flow. The valuable (and sometimes time-consuming) process of gathering information in the first place must be pushed forward to ensure Operations and Maintenance benefits from the existing information.
Why go through the entire process of acquiring information if it already exists?
What to do if I am already operating a plant?
Best-in-class companies know what, when and how things should be done.
The tune in the oil and gas Industry in the early 2000’s was: “If you have a problem, throw money at it and it will eventually go away.” Then the recent oil and gas market decline came by and the new reality has forced a lot of companies to change its way. Fundamentally, resources became limited (both financially and time).
With the limited resources, knowing what, when and how to do things is more important than ever.
Risk based methods such as Risk Based Inspection (RBI), Safety Integrity Level (SIL) Assessment and Reliability Centred Maintenance (RCM) can be used to rank system and equipment criticality (the WHAT) and to develop strategies (the WHEN and HOW) for maintenance and inspection to manage the risks. Strategies are implemented through detailed planning, organizing (‘grouping’ and ‘job packing’) and scheduling.
All of this will have significant impact on many areas! For example, consider that a service interval for a main generator is 20,000 hours. Let’s then assume that by implementing a condition-based approach to inspections, we identify an opportunity to change the service interval to 30,000 hours. Over the course of the next 10-15 years, this will effectively remove several unneeded services from the plan (from around 4 to 3 times). This has a massive knock-on outcome:
- Cost! Taking out one service routine over a lifetime could represent millions
- Staff morale will go up! Firefighting and emergency repairs results on high stress levels and lowers morale.
In times where operational expenditures is the target for cost reduction, having a full overview of what is planned for the asset is extremely valuable. Some of the benefits are:
- Easy to control maintenance budgets: As the work is planned, we can predict the costs in advance and level them out throughout the year.
- Efficient use of resources: Work schedules can be planned and optimized in advance.
- Reduced production scrap: Planned maintenance can be written into the production schedule and performed when the equipment is dry.
Asset Performance Management from DNV
We have a very exciting time ahead of us in DNV. DNV’s existing offerings on Performance Forecasting, Maros and Taro, and Integrity Management, Synergi Plant, taken together make a compelling Asset Performance Management (APM) platform.
Author: Victor Borges