National oil companies are being increasingly challenged on how they manage assets running beyond their design life. In the Middle East alone there are 700-800 fixed offshore platforms and bridges, of which more than 70% are older than 25 years (DNV, 2016). In the past costs attributed to poor asset integrity management were minimal compared to the profit margins attained, but as income diminishes as it has in the last two years, the costs become too great and inefficiencies are highlighted. As a result the optimisation of life extension has to be an integral part of asset strategy.
Knowing where best to invest in assets, and where to reduce costs, can be tricky and confusing without comparable information to hand. It has therefore become increasingly important for operations to be driven by a central strategy that aligns everyone to the same objectives and priorities.
So how should oil companies refocus their strategies then on the challenge of managing ageing assets?
Frequently consultants comes across operators lacking a co-ordinated approach to their ageing asset. The solution involves a three pillar approach to deliver Operations Excellence based on the individual assets concerned.
Asset Life Extension Management (ALEM)
A study of the asset's situation is followed by a project implementation in these three workstreams built around a central and co-ordinated strategy. Based on previous projects this has proven highly beneficial for operators by extending the life of the asset in a cost effective manner, increasing production by 10-20%, and reducing operations Capital Expenditure by 15-25%. However, the result of implementing Operations Excellence is not only improved performance but more importantly provides the Client with clear and concise information in order to make well-informed decisions on where to best invest and get the most buck from their assets. Developing human capital in line with this new strategy is critical for success.