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October 2015

Asset management – what does it mean?

This blog is the first in a series on Asset Management and Technical Integrity Assurance. It aims to generate discussion on what exactly the term means, how it’s perceived, its impact and effectiveness in today’s ever-changing energy sector. It will also explore the aspects that collectively integrate to provide a robust asset management structure in order to provide stable operations and a cost-effective business model.

It’s hoped this overview will stimulate further thinking and increase awareness of maximising the value proposition for assets both up and downstream across the energy spectrum.

The terms and concepts of ‘asset management’ and ‘technical integrity assurance’ can be perceived and understood differently across the energy sector. Some see it as a means to make profit or achieve targets, while for others it’s about production levels or safe operation. There is no doubt that opinions differ.

In order to achieve stable operations and to control costs an asset must be properly managed. Giving proper focus to asset management entails giving due consideration to all its facets including people, process, plant and equipment, regulatory requirements and not least safety and the environment. Failure to recognise the importance of any of these elements, as well as setting and measuring against minimum acceptable standards (MAS), is not conducive to good asset management. Ultimately, this can lead to poor production and high operating costs.

Robust management structure
Let us first consider what asset management means as well as an introduction to technical integrity assurance (TIA). What we are seeking is stable operation and a means to control costs. In order to achieve this, a robust management structure must exist and the core elements of people, processes and practices, systems and equipment, must be fit for purpose. None of these can stand alone without the other and technical integrity is not always assured without these.

A robust management structure that sets and measures against MAS will deliver TIA. The delivery of TIA confirms that MAS have been set by the company and are being maintained or identified to demonstrate where there is the opportunity for improvement. This can include highlighting weaknesses in people skills, processes and practices and the condition and performance of systems and equipment.

Anything below MAS is inadequate and may also be unacceptable. If company standards are not met, then this represents a risk to technical integrity. Furthermore, a more significant concern is if a company is not meeting regulatory requirements, then this is a major risk to the business, its technical integrity and its reputation.

A robust management structure that sets and measures against MAS will deliver TIA.
A robust management structure that sets and measures against MAS will deliver TIA.

When considering performance above the MAS, it is also important to understand the balance between overall effective management across all facets of the asset and over-performing in select areas. This can result in a considerable waste of both cost and time due to incorrect focus. Essentially, there is no point being a world class sprinter if your laces are undone.

Improvements through tragedy
I have worked in the oil and gas industry for more than 40 years and have experienced the transition through the regulatory era of Certificate of Fitness and through the post-Piper Alpha disaster into the current era of Duty Holder responsibility under the Safety Case and written scheme of examination.

A rapid overhaul in regulation in the late 1980s was due to tragedies like Piper Alpha which pushed the oil and gas industry to become more aware that robust asset integrity management is necessary. There is no doubt in my experience that safety has been enhanced because of this and that technical integrity, through properly structured asset management, is absolutely vital to ensure that safe, sustainable and reliable production is achieved.

Lateral learning
There is also a need to consider all means of developing asset management and the priceless value of knowledge sharing from other industries. Over the years, I have experienced various situations where the outcome led to adopting a different approach to what we had become accustomed to whilst maintaining and operating an offshore installation. Sometimes this was by chance and other times it was because of previous experiences.

One example from my time working offshore involved changing the maintenance strategy for emergency lighting systems. The strategy originally required change-out of inverter packs every five years but due to a maintenance backlog it was discovered that inverter packs were still functioning even after eight years in operation. This resulted in a change of planning that prevented unnecessary waste of equipment and cost and avoided the associated drain on resources. This learning was transferred across a number of platforms and costs were reduced.

Another point worth considering when sharing experiences and expertise is the management of ageing assets and life extension and the importance of building-in key requirements early in the design stage. It is also essential throughout the operations phase to ensure that maintenance is optimised and that the optimum time for repair or change-out of equipment is adhered to so as to avoid obsolescence and retain a skilled, knowledgeable team.

In conclusion
If the industry is to maximise the value proposition of its assets, decision-makers need to consider the longer-term operation of its assets. It is therefore essential to establish a robust asset integrity management framework. This should start with goal setting and aspire to operational excellence (best in class). This can only be achieved by setting MAS and closing identified ‘gaps’ through continuous improvement.