Operations Excellence in the Management of Ageing Assets
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Transcript of Operations Excellence in the Management of Ageing Assets
Operations Excellence in the Management of Ageing
Assets
Presented at 2016 Abu Dhabi International Petroleum Exhibition & Conference
Tony Geraghty – Advisian
Operations Excellence for Mature Assets
Why is this important now?
UK GOVERNMENT PRIORITY – MAXIMIZING ECONOMIC RECOVERYMaximizing economic recovery from a mature basin has been a key Government priority in the UK. 1MIDDLE EAST – LARGEST NUMBER OF AGEING ASSETSThe Middle East has the largest proportion of assets which are now beyond their original design life.2SKILLED DEMOGRAPHIC DECREASEAdding to the age of the facilities is a challenging demographic profile for skilled people. 50% of skilled engineers will retire in the next decade.3
Sir Ian Wood, Chairman of Wood Group, was commissioned to write a report for the UK government, pertaining to:• Asset stewardship, infrastructure and
decommissioning strategy• Management of the UK Continental Shelf
natural resources• Importance of operations excellence in
management of late life and ageing assets
UK GOVERNMENT PRIORITY – MAXIMIZING ECONOMIC RECOVERYMaximizing economic recovery from a mature basin has been a key government priority in the UK. 1
MIDDLE EAST – LARGEST NUMBER OF AGEING ASSETSThe Middle East has the largest proportion of assets which are now beyond original design life.2
• It is estimated that nearly 70% of the 700-800 fixed offshore platforms and bridges in the Middle East are over 25 years old1
• Many running at maximum installed capacity• Regional demographics of assets by 2012 production2:
1 DNV GL. (2016, July 31). Middle East rises to age challenge2 Source: Rystad
68%5%
14%
13%
Middle East
Pre-19851985-19941995-2004Post 2005
38%
14%23%
26%
Rest of the World
Pre-19851985-19941995-2004Post 2005
SKILLED DEMOGRAPHIC DECREASEAdded to the age of the facilities is a challenging demographic profile for skilled people. 50% of skilled engineers will have retired in the next decade.3
Per age bracket on a global basis
More than 25% of Petrotechnical Professionals (PTPs) are over 50 years of age and a significant majority will have retired by 2016, leaving a young professional majority.
Number of PTPs on a global basis 2011-2025
3We are currently experiencing the lowest number of experienced Petrotechnical Professionals (PTPs).
SKILLED DEMOGRAPHIC DECREASEAdded to the age of the facilities is a challenging demographic profile for skilled people. 50% of skilled engineers will have retired in the next decade.
Operations Excellence Strategy: What are the key components?
Enhance production
An operations excellence strategy has three objectives and three work streams for delivery:
Advisian / 10
Reduce operating costs
Safeguard (or improve) safety performance
Text
Three ObjectivesA bespoke
approach to individual assets to
deliver ROI
Production Excellence Maintenance ExcellenceAsset Life Extension
Three Work Streams
Woven throughout these work streams is the fact that the management of your human capital will be the ultimate determinant of creating a successful and sustainable change
Example ALE studyOverall cost (estimated)• Asset Life Extension (ALE) reviews
remnant asset life to ensure ongoing reliability and integrity
• An ALE Strategy safely and cost-effectively manages assets when approaching or operating beyond design life
• Example ALE study in a client facility:‐ ALE options (Run, Repair, Rehabilitate,
Re-design, Re-rate, Replace, Retire) compared using a cost-risk optimization methodology
‐ Review of modification portfolio to reduce operations CAPEX by 15-25%
• This must be coupled with an objective measurement of the management system
Asset Life Extension
1-5 years 6-10 years 11-15 years
16-20 years
Civil Electrical I&CRotating Static
Cost
Est
imat
e (M
US$
)
• Electrical Major items – HV motors, switchgear, SCMS (ageing, obsolescence)
• I&C major items – systems upgrade (obsolescence)
Define Maximum Production Potential
(MPP)
ForecastProduction
Measure & optimize production
Review & manage
loss
Review & realize Locked In Potential (LIP)
Generate opportunities
Concentrate on high priority issues Prioritize next steps SummarizeUnderstand assets
constraints
Production Management Framework (PMF) is a complementary set of tools that seeks to
embed operations excellence into the day-to-day running of the business
An example PMF within the UAE:• Majority of losses (including LIP) were
found to be hidden from leadership• Developed understanding of true
technical limits and measured operational efficiency against technical constraint
• Teams able to identify threats to production
• Methodology identified 60k BOED of LIP not being aggressively targeted and a true daily level of daily losses up to 40K BOED
• Losses were identified through Produce the Limit (PtL) Workshop and our Production Management Healthcheck
Production Excellence
Production Excellence means paying attention to everything!
PMF
• The choke model illustrates where effort needs to go to secure improvement
• In the model below, the lowest choke is the commercial one
• However, daily performance is well below that point – hence described as a performance loss
• If the commercial choke could be raised to the next level, this is counted as a Potential Loss
• The choke model is then deployed at the centre of the management system
• It becomes the benchmark against which all production performance can be judged
• It is characterized by a ruthless attention to detail
• We have seen uplifts of 10 to 15% in daily production once this is in place
Production Excellence
Production Management Framework requires the use of an accurate and updated Choke Model
• We use a process called Production Management Healthcheck to give a clear and unbiased view
• This allows a client to see exactly what needs to be worked on
• Experience has shown that we aim first for compliance
• For organizations that have simply reported daily production prior to this, it represents a profound change
The reason this is so hard is that upstream companies have never really been set up to reward such behaviors – prior to this it was all about project execution
Securing improvement starts with an objective measurement of the current level of achievement.
Production Excellence
Example client Healthcheck result
*ECS = Execution Control System
Define Potential (Production Delivery)
Production Forecasting
Loss Management (PLMS)
Measures & Optimize Performance
Locked In Potential (LIP)
Production ECS* Management System
0%
50%
100%
Excellence Lower limit Excellence Upper limit Compliance
Maintenance Excellence
Implementing true Maintenance Excellence accesses a very rich area for improvement
In the 1970s, the civil aviation industry created a process called ‘Reliability Centred Maintenance’ (RCM) which allowed them to ensure they were doing the right things, at the right time, and did so without wasting money.They describe it as,
“A process used to determine what must be done so that a physical asset continues to fulfil its intended functions within its present operating context.”
Many operators are either unaware of or have forgotten critical elements of the intended functions which has a profound effect on the selection of the appropriate maintenance policy.Moreover, the operating context of the plant will have changed so much during its operational life that the original maintenance choices are unlikely to be suitable for today’s challenges.
The Challenge• Planned instrument maintenance costs were too high• ISO 9000 accreditation had made the planned
maintenance program very expensive• Any changes would need to satisfy the UK offshore
regulators prior to any implementation
Approach• A thorough examination of the instrumentation with a
view to:• their criticality• their dominant failure modes• their target availability
• Developed a completely new program with the asset team
• Managed the process with the HSE offshore safety branch to ensure regulatory compliance and acceptance
• Implemented the changes offshore
Benefits• Reduced the instrumentation planned maintenance
program from 15,000 man-hours a year to just 1,800 man-hours a year
• Reduction in POB• A marked reduction in the number of spurious trips
IOC 1 (inst Man-hours)
After
Before
1,800
15,000-88%
Maintenance Excellence
For instance, are all your “Critical Instruments” still “Critical”?
The Challenge• Their business model for industrial turbine packages
has been redefined by the move to long term service agreements (LTSAs) where they now pay for the cost of maintenance
Approach• The Client asked Advisian to assist in reviewing and
re-defining the work programmes to ensure that each task was sensible, defensible and occurred at the appropriate interval.
• The analysis also examined possibilities to make design changes to facilitate better maintenance.
• In all, the engagement delivered a valuable reduction in the maintenance programme, coupled with a new approach to control and protection philosophy, allowing the Client to de-tune overly sensitive instrumentation to provide the End-User with Alarms as opposed to Trips.
International OEM 1 (inst Man-hours)
After
Before
432
984-56%
Maintenance Excellence
Even your OEMs cannot deploy the maintenance policies they had previously recommended, so why should you?
Benefits• 56% reduction in maintenance labour costs for 8,000 running hour interventions• Availability improvements of at least 1.5 days per year per gas turbine from planned maintenance
alone• A reduction in Control and Instrumentation Engineer resource requirement of around 60%
However, once again, you will have to take a good look at your organization to assess how easy these benefits are to access
Most organizations are implicitly aware that their planned maintenance regime is over-burdensome, so decisions are being made about what tasks to leave out. This is normally decided at the front-line.
Current situation Real
Potential
Illustrative onlyActual client example
Se-ries1
Series1
88% reduction
1. Evaluate the current workload
2. Carry out RCM process
3. Result in a significant reduction in work orders (88% decrease)
4. Result does not map on to actual manpower figures, i.e. how much of workload is currently under execution?
5. Factoring actuals, a 30% reduction
30% reduction
Current situation RCM Potential task
reductionAdjustment for
actualsReal potential
realized
Workhours issued
Hours required
Hours expended
Hours required
The challenge is to embed these new techniques into your organization by working with your people
People• Tailored org. structure• Clear roles and resp.• Capability development• Performance mgmt.
Business processes• Best practices (e.g. RCM)• Integrated value chain• High capability• Fast & cost effective
Management system• KPIs and score cards• Linked to strategy• Decisions and actions• Accountabilities Performance culture
• Learning organization• Always testing the current• Continuous improvement
Behaviors• Fact based dialogue• Team based vs.
individual• Embedded & ingrained
Results• Delivered and sustained• Owned by organization• Achieved by
organization
If you have any questions, I would be delighted to discuss them.
You can contact me directly at [email protected]
You can call me on +44-7717-346660
The author would like to thank his colleagues Gavin Hall, Mark Chamberlain, James Nightingale and Ian Jones for their contributions to the paper.
DISCLAIMERThis presentation has been prepared by a representative of Advisian.The presentation contains the professional and personal opinions of the presenter, which are given in good faith. As such, opinions presented herein may not always necessarily reflect the position of Advisian as a whole, its officers or executive.Any forward-looking statements included in this presentation will involve subjective judgment and analysis and are subject to uncertainties, risks and contingencies—many of which are outside the control of, and may be unknown to, Advisian. Advisian and all associated entities and representatives make no representation or warranty as to the accuracy, reliability or completeness of information in this document and do not take responsibility for updating any information or correcting any error or omission that may become apparent after this document has been issued.To the extent permitted by law, Advisian and its officers, employees, related bodies and agents disclaim all liability—direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of Advisian and/or any of its agents)—for any loss or damage suffered by a recipient or other persons arising out of, or in connection with, any use or reliance on this presentation or information.