Meeting the growing challenges of asset integrity management
23 August 2016
The upstream oil and gas industry is cyclically faced with low oil prices and high operating costs. These factors can become even more of a concern when combined with the growing challenge of ageing assets and increasingly complex infrastructure.
Similarly, the downstream market is struggling to maintain the production uptime of ageing assets which are operating at maximum capacity due to increased availability of low cost feedstock and high demand for their products.
The growing pressure on oil and gas decision-makers was highlighted in a survey as part of Lloyd’s Register Energy’s Technology Radar research programme. Almost two-thirds (63%) of oil and gas decision-makers polled said pressure to reduce asset downtime had increased in the last year alone. Asset costs are also a major concern for oil and gas industry decision-makers with almost half (49%) reporting that asset integrity savings are more important than they were 12 months ago.
These findings highlight that improving asset reliability is crucial if oil and gas companies are to stay competitive, realise cost efficiencies, and most importantly maintain safe operations. In addition to the market challenges of price volatility, shareholders are pressing companies to maximise value. These pressures on oil and gas decision-makers are compounded by a growing need to reduce asset downtime, maximise the potential of an ageing workforce, and make use of limited resources.
The risk of asset failure
The risks associated with asset failure can be catastrophic in terms of human life, environment and monetary loss. It’s estimated, for example, that equipment failure costs the US refining industry over $4 billion per year, and since 2009, well integrity failures have cost operators over $75 billion.
In order to tackle both the rising risks and the ever-increasing cost of failure, asset management software has a vital role to play in tackling daily operational challenges. Correctly deployed asset management software tackles these challenges by optimising inspection and maintenance regimes and driving efficiencies. Identifying potential problems before they occur is far more effective than trying to rectify issues once they have developed.
Currently, many asset intensive organisations use an Enterprise Asset Management (EAM) system, such as IBM Maximo or SAP, to manage the performance of physical assets across the entire asset lifecycle on a common platform. Embedding knowledge building and decision making tools including Risk Based Inspection (RBI), Reliability Centred Maintenance (RCM) and Root Cause Analysis (RCA) into an existing EAM application enhances the value of existing investments and delivers numerous advantages that reduce risk and operating costs and minimises the risk of equipment failure.
Gaining improved asset understanding
Knowledge of an asset affects critical decisions regarding maintenance, inspection regimes and investment plans, therefore the improved understanding provided by asset management software can have significant long-term impacts on business planning.
The ability to quickly identify pressure points is essential at a time when only 30% of survey respondents described their organisation as ‘very effective’ at identifying the assets and equipment that require urgent attention. Perhaps most startlingly, less than a third (31%) of our respondents described their business as being in complete control of the electronic data it holds.
Applying industry-specific asset models such as RBI and RCM within the EAM can help provide the level of insight into asset criticality and risks that asset managers need.
Typically, less than 10% of assets carry 95% of the risk, so heightened knowledge of individual asset integrity is the key to minimising risk across any one business’ system. Achieving this highest possible performance of an asset against the lowest possible costs, whilst ensuring safe operation, is a challenge faced by many operators. To attain this, operators must understand what areas to focus on and have access to reliable and accurate performance data.
RBI identifies the unknowns and cumulative risks of ageing equipment, capturing the deterioration mechanisms and historical information to create optimised inspection and maintenance strategies. The RBI approach facilitates pro-active predictive approaches, rather than reactive decision making.
Reducing risk by correctly identifying failure incidents
When dealing with issues of asset integrity, it is vital that the root causes of any failure incidents are identified in a structured process. Operators often apply makeshift solutions, but problems reoccur, having increasingly negative effects on reliability, the environment and safety. An effective RCA solution enables high-impact incidents to be thoroughly assessed with the outcome permanently available to all stakeholders. This improvement in transparency and traceability is key in systematically reducing risk.
With oil and gas decision-makers under increasing pressure to reduce asset downtime, minimise operating costs and prosper in a volatile market, asset integrity is under threat. The risks associated with deterioration in asset integrity are significant, and asset software management has a key role to play in the management of these risks.
A single resource software solution allows oil and gas operators to identify critical assets, increase equipment reliability by at least 20%, reduce failure risk by up to 90% and achieve cost savings of up to 50%. A risk-based solution provides decision-makers with the information required to optimise assets and understand ageing infrastructure while safety in the supply chain remains paramount.