Within the cut and thrust of securing Capex budgets, more oil and gas companies are increasingly operating assets beyond their original design lives and looking to save on new investment but forgetting that the Opex budget needs topping up to cover for the increased Asset Integrity activity. As my mother says, “you can’t have your cake and eat it”. Or can you?
The energy industry is faced with the challenge of stakeholders’ increasing expectations and imposing their economic pressures. This is extenuated by the challenges in managing aged assets where many were built as early as the 1960’s and are still operating today. In fact, I have managed integrity programs on three major assets that were over 40 years old: sour & sweet, offshore and onshore and assets that were newly commissioned at costs greater than 10 Billion USD to construct. All of which offered unique integrity challenges regardless of the budget size.
Asset Integrity Management programs must target the integrity and reliability of the assets, the overall effectiveness of the monitoring systems in place and the knowledge and competence of the team managing the asset. Pretty simple I hear you say, but as everyone involved in Asset Integrity programs will tell you, “if only it was that easy”. Budgets do not always allow you to cover all these elements nor reflect the level of risk. Neither do some integrity programs I have found.
George Santayana once said, “those who fail to remember the past are condemned to repeat it”, simply meaning history tells us that we are not very good at learning from history in relation to the way we manage our assets during the peak and through budget rounds or fluctuating oil prices. Consistency is everything when it comes to managing your assets, so taking a budget vacation in some areas will undoubtedly catch you out. “History does tell us that much.”
If you look around the world in the last ten to fifteen years, there has been a large reduction in investment in new production facilities coupled with low budgets for refurbishing the plants in long term operation. The thumb screws have been placed on budgets and resources to cut Opex costs, yet the industry is still facing increased public expectation, and concern from stakeholders regarding potential environmental and media fall out from incidents. We must never forget the valuable learning from the many incidents around the world which have lifted the focus on asset integrity. In addition to this we should never need to jump on the hysteria bandwagon of an incident to try and leverage increased budget as this can have a negative effect and open your program to potentially some tricky questions.
If you think Asset Integrity costs are expensive, just wait until you have a major incident. This should be the message relayed from the very early stages so that the correct budgets and expectations are set as part of the tailor-made program.
Modern day asset integrity service providers are asked to refine their Integrity Management strategies in support of the overall business strategy which can cause some scratching of the head, maybe a bit of heartache but all told something that is not impossible to achieve when you apply the required risk evaluation to each piece of the integrity jigsaw which I touched upon in a previous article.
We know that many assets around the world are operating beyond their nominal design lives and we know (and should appreciate) that the owners of such facilities face a dilemma and challenge of their own: how do you maintain production capability in a cost-effective way while preserving the integrity of your assets? This is a given fact, so any asset integrity services provider worth their salt will grasp at the opportunity to help “sculpture” an integrity program that can work for both parties without compromising on key areas of associated risk. It can be done, has been done and more importantly it is being done in my area of influence.
Estimating prolonged asset life is not straight forward to say the least and some of the tools we have are criticality assessments, risk-based inspection (RBI), reliability-centered maintenance (RCM), Fitness for Service (FFS) assessments and some factors are totally unknown and down to economical late life field recovery programs which gain approval behind the scenes. Unfortunately, some facilities are still suffering many unexpected through-wall piping failures and associated loss of containment, and we still get leaking storage tanks and widespread corrosion management issues despite believing that everything was being managed correctly. This tells us that there is always room for improvement, and from every failure comes a learning opportunity.
I once had a senior manager ask me to let an inspector go because he failed to pick up and report on a defect that led to a failure and the failure had some significant costs associated. I told the manager that everyone had learnt from the failure and that the inspector had just underwent the most valuable and expensive training course possible at our cost so why should we let that experience and expense be wasted by letting him go? (He didn’t go by the way.)
One recent trend which is compromising integrity across the world specifically related to late life assets is “off the cuff” plant modifications, operating excursions outside of the operating envelope and process engineering being challenged to squeeze the boundaries of production capabilities.
Self-inflicted deterioration can be induced by operating cycles, shear stresses, flow stresses, exceeding the design life and the cumulative effect of operating for longer periods, at higher temperatures. This is being done without considering the long-term effect of internal scaling and production deposits that impact on corrosion inhibition effectiveness, flow and cooling efficiency in tubes, turbulence and so forth. Does this sound familiar? If so, you need an integrity program that can adapt to the changes and recognize when they are starting.
Specialist integrity service providers are now becoming a more cost efficient and attractive option around the world, as they can deliver an independent range of established services which are market leading, international code compliant and offer a complete life-cycle solution to their clients. These services can be effectively implemented at any stage of an asset’s life cycle and have been proven to drive down inspection, maintenance and repair costs whilst improving reliability and safety which is what the stakeholders and energy companies have been crying out for.
Delivering unique and tailor-made asset integrity services for clients’ ever-changing needs and inline with their business plans is something that the industry has been looking for considering the cost reducing challenges I have mentioned.
One additional plus is that these new programs are fresh, versatile and add value rather than the sterile, stagnant version which has lost its way over time. Having a cost-effective tailor-made integrity program specifically developed for your asset’s size and complexity is simply “good for business”.