Overcoming obsolescence

John Bradbury

September 1, 2015

There is a big risk circling mature production installations where hardware that was once state of the art now poses a problem for managers on late-life assets. That risk is obsolescence. John Bradbury reports.

BP’s Shah Deniz facility, which started up 2006. Photo from BP. 

“Obsolescence is becoming a growing challenge within the offshore oil and gas industry and subsea industry,” warns David Saul, reliability and technology lead for BP global subsea hardware.

Saul suggests equipment obsolescence is inescapable; the challenge is managing it. “Obsolescence is inevitable,” Saul says. “It cannot be avoided.” However, he says, operators can minimize its impact and its potential for higher asset costs by planning and proactive action.

Speaking at the MCE Deepwater Development conference earlier this year, Saul suggests obsolescence involves many facets including equipment and supplies, skills, and software.

Hardware can become obsolete through technology progress, along with the equipment necessary to maintain it, such as test apparatus. But, it applies to software, too. Saul points out many systems now rely on unsupported applications, procured without any thought about obsolescence. “There are lots of systems out there – with Microsoft prefixes such as XP and Windows NT,” he cites.

Equipment obsolescence can occur for a number of reasons: “The supplier may have taken a commercial decision not to supply the equipment any longer...or they could have gone out of business,” Saul says, warning of reliance on a sole equipment source, since sub-suppliers may stop producing a necessary product. “You may be creating vulnerabilities you are not aware of,” he says.

Hitherto, industry suppliers have offered to keep manufacturing parts, but Saul suggests that is now happening less. But, he sees this as a positive, arguing it provides supply chain clarity, when a supplier is no longer prepared to manufacture key components, particularly for electronics packages, telling customers: “‘You have six months left to make a last time buy.’ Actually, that sort of clarity, I find helpful,” Saul says. “Today, there is a lot more proactive mitigation out there.”

Knowledge

Obsolescence stems from access to knowledge within original designs, documents and drawings, and engineers themselves may have retired. Saul urges companies to consider historical document storage, to ensure they can still access data, which may exist only on an outdated device. Field operators change, leading to a loss of knowledge; test standards change, and procedures become outdated. All lead to obsolescence. “People retire and you lose that knowledge,” Saul says. Obsolescence can also come from materials that are no longer legal. “With long-life fields, system obsolescence is a particular issue to us,” he says.

Saul urges companies to consider product life cycles as a series of connected gears: “In the time it takes to get from concept to delivery for a large mechanical structure, some electronic sub-systems components could have gone through five generations.”

With newer products, reliability issues emerge over time, particularly with electronics, such as a mobile phone, which may only have an 18-month lifetime. Whereas with substantial offshore assets, a product’s lifetime could be 25, 30, 40 or even 50 years, so the objective is maintaining production without interruptions from minor component failures: “You are going to have to plan how to do that.”

BP’s approach towards obsolescence has changed, Saul says. About 10 years ago there was an “uncontrolled” transition to off-the-shelf parts, to ensure spares didn’t run out, to offset equipment obsolescence. This was particularly true of subsea packages: Similarly, Saul notes that when Motorola withdrew from manufacturing military-specification parts it caused consternation in the defence industry.

Furthermore, newer legislation, for example regulations on the Restriction of Hazardous Substances, and OSPAR – have compelled operators and contractors to meet more strict criteria for products.

Now, BP is more proactive, using JIPs to offset obsolescence risks. Suppliers are checked during vendor audits. BP places greater emphasis on conforming to industry standards, using fewer bespoke systems. “We are expecting subsea systems commissioned in the 1990s to go on until 2030+ now. That is going to be a challenge.”

Saul also warns against spending less money up front for a short-term solution: “If you go down the bespoke, redesign route, you could end up adding two or three noughts to your costs.”