Tackling the backlog

Elaine Maslin

January 1, 2016

With many assets now more than 25 years old, asset integrity is a daily concern on the UK Continental Shelf. Is the industry keeping up? Elaine Maslin reports.

Rope access is used to get to areas usually out of reach. Photo by Craig Hannah. 

When the North Sea started its first offshore production in 1975, some 40 years ago, it was with a view that the industry would be fairly short lived and certainly not still going well into the 2000s.

Yet, despite the current market challenges facing the industry, many facilities are still running long after their original cessation of production date and they will be expected to continue for years to come. As a result, asset integrity has been and remains a big topic. But, has the industry got a grip on it?

According to figures from Oil & Gas UK, the safety critical maintenance backlog has been creeping up year-on-year since 2010, amid US$100/bbl oil prices. Its Health & Safety Report 2015 puts the safety critical back log at an average 8900 man-hours per installation for 2014, divided into 2200 man-hours planned maintenance backlog per installation (2009: 500 man-hours per installation), 2700 hours of corrective maintenance backlog (2009: 750) and nearly 4000 hours of deferred maintenance backlog (2009: 700).

At the same time, the number of companies reporting their backlog KPIs (key performance indicators) has fallen, according to the 2015 report, and there is uncertainty around the quality of the data supplied, with work now ongoing to find ways to validate its accuracy.

Falling efficiency

Over a similar period, production efficiency, an indication of how well assets perform compared to how well they could perform, has been falling, from just above 80%, in 2004, to about 65%, in 2014, according to latest figures, presented at the Energy Institute’s Asset Integrity Conference in Aberdeen in late 2015. According to Gunther Newcombe, who presented the figures, unplanned production losses – as opposed to planned, export, and reservoir losses or well work – accounted for about half of the decrease in production efficiency from 2009-2014.

Newcombe is director of exploration and production at the new independent regular in the UK, the Oil and Gas Authority (OGA). He says there are operators currently with production efficiency at less than 20%, with just seven out of 29 UK Continental Shelf (UKCS) operators, with production efficiency over 80%, and it’s the majors who are most likely to be at the bottom of the table. Over the same period, production has fallen, from more than 3.4 MMboe/d to just under 1.5 MMboe/d in 2013.

So are these data linked?

Kevin Harris, Production Chemistry Business Manager at Intertek, examining a pipeline section damaged by scale.
Photo from Intertek. 

“Safety critical maintenance backlog has increased from just above 700 man hours per installation to more than 4000, as at Q3-4 2014, with the increase having started from 2010, and the greatest rises in 2013 and 2014. Meanwhile, unplanned losses account for the greatest increase in the lost production efficiency, with planned shutdown time also increasing,” Newcombe says.

Russell Breen, operations manager, energy division, Health and Safety Executive (HSE), told the event: “The safety critical backlog has steadily increased from 2010… [from] well before oil price dropped. If anything, the oil price is going to make it worse.”

Alternate view

The data appears pretty stark. Is there more to it? According to some, the rise in the backlog from 2009 has been due to greater focus on asset integrity, following on from the HSE’s work in this area, both in asset integrity and aging and life extension (ALE). This meant more work is being found and listed than before, accounting for some increase in the numbers and potentially showing a positive trend towards addressing maintenance. It’s also thought that some operators have become conservative in how they report their safety critical back log – i.e. reporting more than they should, as under reporting the back log would get them in trouble with the HSE.

Indeed, in the same period, the industry has a high level of safety, compared to other industries, suggesting its issues around asset integrity are not about safety.

Also, so-called Level 1, 2 and 3 findings lodged by the HSE on its inspections have fallen. Level 2 are issues which wouldn’t have a great impact and Level 3 are those which could have a significant impact. According to Breen, HSE data shows the average number of open level 2 findings per installation has halved, from about 14 in 2008, to about seven in Q3 2014. The total number of open level 3 findings, across all installations, has also fallen, from about 35 in 2008 to 12 in 2014, suggesting an improving picture, in terms of impact of installations.

The number of hydrocarbon releases has also fallen by 48%, after a campaign to reduce them by 50%, the OGA showed. But, talk to others and it’s described as sheer complacency.

Safety critical maintenance backlog on the UKCS. 
*Average man hours per installation. Data from Oil & Gas UK. 

Enforcement

The level of backlog hasn’t passed the authorities by. Late-2014, the HSE issued an enforcement notice to an operator purely due to its huge maintenance backlog on one platform.

Judith Hackitt, the HSE’s CEO, said the notice was served because of their “massive maintenance backlog.” She said: “The operator had “very clearly had not given any thought to the cumulative impact of this huge backlog on their overall safety integrity.” HSE confirmed that the operator involved was BP and the notice, served November 2014, related to the Bruce facility.

BP is not alone in struggling with its backlog. “The reality is, the industry hasn’t done a good job over the last 20 years of maintaining offshore infrastructure,” an industry professional told OE.

To try and get a grip on the work required, HSE says operators should get a better understanding of the type, level, and extent of maintenance required and the impact of failing to maintain it, have clear plans to deliver that maintenance, the necessary supervisory and engineering support, inspections and audit to ensure competent delivery and robust verification of safety and environmentally critical elements.

But, Breen says: “I think first we need to get consistent handle on what we are measuring here and we then need to know what we are doing and what we need to do to be able to approach it.”

Work in progress

Both the Energy Institute and Oil & Gas UK (OGUK) have issued asset integrity management and ALE guidelines and OGUK is working with the industry on cost efficiencies and ways to better coordinate shutdowns.

The OGA is also focusing on asset stewardship, under one of the new body’s eight boards, led by Newcombe and Nexen Petroleum UK operations director Ray Riddoch. An enhanced asset stewardship strategy is being developed, to be published in Q1 2016, with two areas already chosen for specific attention: reducing the amount of time dedicated to vessel inspection and managing corrosion under insulation (CUI). New technologies will have a key role to play in this area, as well as risk-based maintenance management approaches, condition-based monitoring and improved leak detection, Newcombe says.

An eye on decom

While assets are being driven beyond their design life, they will still at some point need to be decommissioned, and it is increasingly accepted this is an area which needs to be taken into consideration as part of an asset integrity program, says Andrew Duncan, who worked at the HSE on its KP4 ALE program (OE: September 2014). KP4 was one of four HSE programs focusing directly or indirectly on asset integrity. Duncan, now lead consultant, materials and corrosion engineering, at Intertek, says: “Over the years we have had a design team, operating team and decommissioning team as separate teams, but I would argue they need to be together to manage the life cycle better. If unmanaged, degradation continues, with [the result being] failure before the end of the life of the reservoir. Improved economics have pushed cessation of production (COP) back some years, so we have to introduce more corrosion management to allow us to at least achieve COP. COP plus five years is where we should be targeting to give us a cushion. We should also consider removing redundant equipment, simplifying processes and bringing in new fields.”

Indeed, there is ongoing discussion around new tax breaks to allow industry to partly decommission facilities early, while keeping them producing. But also, if equipment is properly maintained, it can then be recycled and used elsewhere he says, a practice which the onshore chemicals industry has managed but, while discussed in the North Sea, hasn’t been adopted significantly. All of which makes maintaining assets well a win-win.