Gregory Hale explains how avoidable downtime costs producers billions of dollars every year, with equipment failures being the most common culprit.
Engineers remotely monitor all aspects of oil production, and work across locations to make quick adjustments in Shell’s Smart Fields control centers. Photo from Shell.
When a team of NDT inspectors witnessed a block of ice falling to the rig deck from a pipe two levels above this past summer, they knew they had a potential asset integrity – and safety – issue on their hands.
The ice had formed when rig workers partially shut down the pipe for maintenance work and the halt in usage caused the temperature of the pipe to drop considerably, despite it being summer. Ice then formed and fell when the pipe was brought live again. No one suffered an injury and it turned out the pipe remained intact, but that is not always the case.
Analyzing asset integrity can go two different ways, where one would be the high tech digital perspective focused on software working with hardware to understand how devices and components are functioning and how long before they need replacement to ensure continued uptime. Automation technology in the 21st century.
Then there is the other direction like the incident this past summer where a level of maintenance needs to occur on the low tech side where workers roll up their sleeves to ensure deteriorating assets continue operating, while processes remain up and running. After all, time is money.
It has been estimated that, globally, mostly avoidable corrosion-related leaks and equipment failures cost the oil and gas and chemicals industries US$220 billion, according to a report from Shell. On top of that industry averages suggest 5% of production capacity is lost each year due to unplanned downtime and in a down market those numbers can add up to big losses. More than any other reason, equipment failures are the most common culprit. When you combine this with fewer resources (money and people) keeping the operation running is a challenging task.
“Reliability is more important than anything else,” said Robert DiStefano, vice president and general manager for reliability consulting at Emerson Process Management. “As much as 5% of production capacity worldwide suffers from reliability issues and 43% of that 5% includes unplanned downtime because of equipment problems.”
Companies that have solid reliability programs reap benefits, including:
- Reduced downtime and increased profitability
- Spending less money for maintenance
- Increased safety – incidents go down when reliability goes up
“People are starting to use reliability as a business strategy,” DiStefano said. “If a CEO is not asking direct reports about downtime and what money they are spending on maintenance, then they are derelict of duty. You have to change the practices.”
Tough times call for tough measures and the operation needs to stay on top of maintenance or out of condition assets could cause an unscheduled stoppage.
With unplanned downtime and maintenance issues solved as they come up during the day, it typically results in poor reliability and safety. World-class operators frequently review maintenance policies and nurture a culture of continuous elimination of all sources of loss, according to a report from industry consultants McKinsey & Co. They optimize preventive and condition-based maintenance for critical equipment, while minimizing additional maintenance for less-critical systems. Key requirements are a full understanding of the criticality of equipment, a complete maintenance log, and a readiness to draw on all available expertise in optimizing maintenance policies.
When regular maintenance policies fail to eliminate losses, the best operators propose modification projects with clear business cases and rank them according to return on investment, according to the report.
No unplanned downtime
Workers perform inspection on an offshore installation. Photo from Oceaneering.
“(Oil companies) are spending for efficiencies. They are looking at asset integrity. You can’t afford unplanned downtime,” said Luis Gamboa, global business development manager for oil and gas at Rockwell Automation.
There is no doubt companies are trying to achieve more with less. So the focus in these down times is on extending the life of existing assets. But if operators don’t do that properly, then there will be a greater loss of process containment and reliability. The solution is to be as smart as possible and monitoring processes are key.
Asset integrity ranges from technical meetings involving experts advancing state-of-the art equipment design, inspection, testing, or reliability, to a plant operator on routine rounds spotting leaks, unusual noises or odors, or detecting other abnormal conditions.
However, this element primarily involves inspections, tests, preventive maintenance, predictive maintenance, and repair activities performed by maintenance and contractor personnel at operating facilities and quality assurance processes, including procedures and training, which underpin these activities. Asset integrity extends throughout the life of the facility.
Taking a quick look at successful offshore energy companies, it is quick to see a strong commitment to a maintenance and safety hierarchy that ranges from the field level all the way up to the corner office will always pay off. Strong safety and maintenance cultures go hand-in-hand because poorly maintained assets invariably end up the root cause of accidents to assets and cause injuries – or worse – to employees.
Beginning at the platform deck level, a company’s skilled workers may perform complete end-to-end maintenance, or management may outsource operations and maintenance (O&M) activities to technical services providers.
Learning from others
Photo from Stork Technical Services/Maarten de Groot Photography.
Along the Gulf Coast, asset owners/operators routinely outsource advanced operational maintenance and repairs to technical service providers who specialize in one or more aspects of the maintenance “ladder” that extends from construction, hookup and commissioning to operations to shutdowns and turnaround.
One key finding in a research study was the desirability of an unbroken chain of accountability from the work scope and project goals outlined by the asset owner to the supervisors and crews of contractors doing the work.
It was clear from the study the classic cliché of too many cooks spoil the broth really comes into play offshore. By reducing the number of maintenance service providers to less than a handful makes managing the chain of accountability much easier. Working with fewer players ensures safer, more efficient and easier-to-manage operations. When significant risk reduction, reduced personnel on board and lower O&M costs are the end game, having fewer services suppliers helps ensure a productive asset integrity environment.
Dividing O&M among multiple suppliers can be more challenging and costly because each supplier has a limited work scope and lacks an understanding of the big picture. From a safety and efficiency standpoint, using fewer technical service providers gives better results, the study said.
That is why Gulf of Mexico operators can benefit from lessons learned from other offshore regions where operators have used the “fewer supplier/higher chain of accountability” philosophy for years, said Martha Sandia, vice president of North America and the Caribbean for Stork. The best results come from partnering relationships where O&M functions go out to a single provider who takes responsibility – and ends up held accountable – for improving safety, reducing downtime and lowering operating costs.
Communication means success
Partnering relationships also facilitate flexible commercial models based on key performance indicators (KPIs). These performance models can successfully apply in turnkey projects provided quality communication skills prevail between an asset owner/operator’s staff and the technical service provider.
Information and communication are keys and some asset owners/operators normally do not give contractors access to the information they need to design and implement an effective O&M program, but achieving effective O&M coordination starts early in the planning stages when technical advisors from the technical service provider can analyze and integrate all tasks into a coordinated plan that incorporates contingencies, Sandia said.
To help overcome owner/operator reluctance, there are programs to allow asset owners/operators and service provider project managers to jointly set project objectives and KPIs, Sandia said. “Part of the program is to create a workshop led by a neutral facilitator whose agenda is focusing on opportunities to streamline O&M processes as well as safety compliance, hazard awareness and risk mitigation.”
The workshop brings together four key stakeholders from each side – asset manager, O&M, HSE and procurement. From the service provider there is the area manager, O&M project manager, HSE and supply chain representatives.
“During the workshop, participants identify specific risk-reducing and cost-saving activities and both sides create a specific value proposition that can cut costs and increase efficiency and safety,” Sandia said.
At a basic level, asset integrity is the systematic implementation of activities, such as inspections and tests necessary to ensure important equipment remains suitable for its intended application throughout its life. Specifically, work activities related to this element focus on preventing a catastrophic release of a hazardous material or a sudden release of energy and ensuring high availability (or dependability) of critical safety or utility systems that prevent or mitigate the effects of these types of events.
Designing and maintaining equipment fit for its purpose and functions when needed is paramount. Maintaining containment of hazardous materials and ensuring safety systems work when needed are two of the primary responsibilities of any platform.
Whether it is a high tech solution or using a low technology approach, rigs need to stay up and running and assets need to stay in top shape because the downturn will not last forever and there will come a point to where revenue generation will take off.