Monitoring And Management: How To Pre-Empt The Downtime

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Tim Haïdar
11/24/2011

Monitoring and reporting are crucially important to the oil industry in order to assess the performance of current projects and analyse the information provided to help improve future ventures, all in an industry that is struggling to maintain ageing assets.

This is a particular problem with offshore projects, so organisation need to have a strategy in place to ensure they maintain the highest standards during shutdowns and turnarounds, making sure that employees and leaders adapt quickly and efficiently to improve the safety and quality of projects and take ownership should anything go wrong. One way that businesses in the industry can do this is by ensuring they have a thoroughly thought through risk assessment strategy in place so that all issues that do arise are dealt with efficiently and proactively.

Tackling problems after they develop, rather than preventing them from arising in the first place, can be a very costly process, as Aker Solutions ASA has recently discovered. Norway's oil industry firm revealed a surprise loss in the third quarter when it published its results earlier this month. It claimed to have made a pre-tax loss of 214 mln compared to the 23.5 mln profits it was forecast for quarter three as a result of encountering problems with its Brazilian subsea projects. The firm was tackling problems with delivering subsea oil and gas production systems to Brazilian oil firm Petrobras, experiencing an initial drop in share prices as a result, although this has now rebounded.

"Delivery schedules for all major subsea production systems currently on order from Petrobras have been substantially further delayed and additional costs will incur," the company said, adding that the problems have been caused by quality issues and "over-optimistic" planning.

According to Reuters, Alan Brunnen, the new head of Aker Solutions' subsea operations, said: "We underestimated the amount of research, development, engineering, qualification, complexity."

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"We were not sufficiently hands-on ... we didn't work efficiently across borders," he added, but claimed that he was optimistic that the problems would be solved and he felt that it was unlikely the firm would face similar problems in other parts of the subsea project. The mistake is likely to impact their reputation, particularly in Brazil, and the organisation will have to work hard in order to regain the trust this issue has lost them with their customer base.

Simon Moss and Andrew Sheahen from PA Consulting suggested that strong communications, clear guidelines and project coordination can help firms prevent problems arising in the first place, an issue that is particularly important should companies use outsourcing at any point during the process, Directions Magazine reported. The pair explained that many oil industry firms seek to reap the rewards of using offshore services but have concerns that service levels will not be met, physical distances will throw up issues and that outsource providers may not be effective.

"Indeed, without the correct management, and contractual and communication arrangements in place, these fears can become reality," said the pair. Messrs Moss and Sheahen insisted that it is essential for businesses to take the time to thoroughly plan projects and have a clear and comprehensive guide so that there is no confusion, on top of this, regular communication, including face to face meetings, should help avoid any complexities. However, should they arrive they will be quickly sorted.

A similar approach can help prevent safety issues, including those caused by asset failure, and ensure that businesses are compliant with Health and Safety Executive standards. The watchdog insisted that as part of their management systems, businesses in the oil and gas industry have a responsibility to ensure they are aware of the challenges posed by aging assets, can demonstrate that the workforce is adequately competent and well-trained, as well as undertaking regular risk assessments and audits to make sure problems are dealt with before they become major incidents.