De-risking Gulf of Mexico operations and maintenance practices

Martha Sandia-Stork

April 22, 2014

Maintenance, like safety, is everyone's business. Even a cursory examination of successful energy companies reveals a strong commitment to a maintenance and safety hierarchy that goes from employees in the field all the way to the executive offices. Strong safety and maintenance cultures go hand-in-hand because poorly maintained assets can be the root cause of accidents and collateral damage to personnel and assets.

Beginning at the field, platform deck or plant floor level, a company's skilled workers may perfom complete end-to-end maintenance, or management may outsource operations and maintenance (O&M) activities to technical service providers. On the Gulf Coast, asset owners and operators routinely outsoure advanced 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, shutdowns and turnarounds. Today, even relocaation and decommissioning activities are handled by highly specialized firms with the skills, equipment and processes in place to manage complex projects.

O&M outsourcing over the lifecycle of oil and gas assets was reviewed in a Gulf Coast research study. A key finding 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 that reducing the number of maintenance service providers to less than a handful makes managing accountability much easier. Working with fewer players ensures safer, more efficient and easierto- manage operations. When significant risk reduction, reduced personnel on board and lower O&M costs are the end game, it makes sense to have one technical services supplier rather than many suppliers. The practice of 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.

GOM operators can benefit from lessons learned from other offshore basins where operators have been employing the “fewer supplier/higher chain of accountability” philosophy for years. The best results come from partnering relationships where many O&M functions are given to a single provider who takes responsibility for improving safety, reducing downtime and lowering operating costs. Partnering relationships also facilitate flexible “bonus/malus” (reward/ penalty) commercial models based on key performance indicators (KPIs). These performance gainshare models can be successfully applied in turnkey projects as long as there is excellent alignment between an asset owner/operator’s staff and the technical service provider.

Some asset owners/operators are not accustomed to giving contractors access to the information necessary to design and implement an effective O&M program. Effective planning should start early, when technical advisors from the supplier are allowed to analyze and integrate all tasks into a coordinated plan that incorporates contingencies. To help overcome owner/operator reluctance, Stork is introducing an innovative O&M Supply Chain Lab process to allow asset owners/operators and Stork O&M project managers to jointly set project objectives and KPIs. The process includes a workshop led by a neutral facilitator whose agenda is to streamline O&M processes and focus on safety compliance, hazard awareness, and risk mitigation.

To be successful, the workshop must bring together four key stakeholder positions from each side—the asset manager, and O&M, HSE and procurement representatives. On the Stork side are the area manager, an O&M project manager, and HSE and commercial representatives. During the workshop, participants identify specific risk-reducing and cost-saving activities that the technical services specialist can provide—activities that most general contractors cannot offer. Both sides— the owner/operator and Stork stakeholders—formulate a specific value proposition that examines how operating expenses will be reduced while efficiency and safety are improved.

An example of such a value proposition comes from the cost savings that result from Stork’s ability to combine field project managers and technicians with multiple skills. For instance, many Stork team members have not only task-related maintenance skills—such as hot bolt clamping and flange integrity management and

repair—but also specialized rope access skills. They are recruited based on specific competencies such as structural repair knowledge and are trained to work on oil and gas assets by using rope access to gain entry to areas that are typically accessible only via traditional scaffolding. Not only is traditional scaffolding expensive, it is also time consuming to erect and dismantle, posing an increase in risk exposure. Stork’s skilled workers with rope access experience can get to any place on stationary or floating facilities quickly and safely to perform inspections, repairs, rescues or fabric maintenance, as required.

Focusing on core competencies

If successful, the O&M Supply Chain Lab process should allow owners/operators to better manage a wide range of assets— such as offshore platforms, refineries and gas plants. These assets require specialized expertise for O&M activities. Recruiting and retaining skilled technicians to carry out these activities is increasingly difficult and expensive. And, more importantly, the fast-changing regulatory and compliance environment makes the chain of accountability an important factor in hiring personnel and selecting contractors.

In addition to these challenges, high turnover in the workforce, lack of experience, and limited resources for oversight and management are increasing risk and costs. It follows, then, that outsourcing to the right O&M provider should be based on finding a company that has O&M skills as a core competency. It is also clear that choosing a technical services provider using three-bids-and-a-buy procurement practices may result in lower day rates but higher overall risks, costs and downtime. Since uptime, O&M costs and safety can be quantified, these factors should be weighted in importance over day rates.

Stork’s management team is committed to helping asset managers choose between using their own teams to conduct O&M activities or to outsourcing to a firm like Stork. It is their belief that the O&M Supply Chain Lab process will result in a fit-for-purpose, managed performance package of services that increases asset value. When retained early in the O&M design and planning process, the Stork team can scope the project according to specific needs, devise appropriate solutions, and build a plan that is both measurable and traceable.

Stork is continuously enhancing and improving customer service by attracting and retaining the best people in the industry, driving innovation and problem-solving, and determining how to meet or exceed expectations by an assessplan- act-check way of thinking and doing. Stork is dedicated to determining ways to continually improve on behalf of its customers, focusing always on quality, reliability and most importantly the safe delivery of services.

Stork provides full-service asset inspection and nondestructive testing, and mechanical and fabric maintenance that add value throughout the asset lifecycle.