Why There’s a ‘Biting Commercial Imperative’ to Manage Upstream Assets

Oil & Gas IQ

Effective corrosion management techniques are essential for the upstream oil and gas industry. The National Association of Corrosion Engineers (NACE) estimates that the problem costs the United States alone $270 billion (£177 billion) per year and government studies suggest that the direct cost of corrosion equates to 3 to 4 percent of the GDP of industrialised nations.

The current economic climate means that the upstream oil and gas industry cannot afford to deal with the loss of earnings, and potentially costly compensation, following a shut down or leak due to corrosion.

Higher levels of acidity in crude oils on the market today also makes corrosion management an integral part of refining as well, making the process a priority across the whole industry.

April 24th 2010 represented the first world corrosion day, as NACE served to highlight the importance of understanding that corrosion management is an issue that should be considered at all times by the upstream oil and gas industry.

"In the public, industry and government, the term ‘corrosion’ is usually recognised only if spectacular damage occurs as a result of corrosion attack, sometimes in dramatic form of a bridge collapse or a pipeline leak or explosion.

"Thus, there is a significant need for increased awareness of corrosion as a phenomenon and as a risk," the organisation explained.

Asset Integrity in the Upstream Oil and Gas Industry

Asset integrity should be one of the first priorities for the upstream oil and gasindustry, which is seeing falling levels of investment, according to Brent Fraser, upstream lead account executive, Shell Global Solutions (Malaysia).

"The consequences of failing to maintain assets can be significant. One study suggests that the cost of corrosion for the US oil and gas sector is in the order of $1.3 billion a year–and that says nothing about less tangible costs that a business may experience," Fraser explained.

Shell highlighted that there is a "biting commercial imperative" for companies in the upstream oil and gas industry to work with their existing fields which are approaching maturing and effectively manage their upstream assets.

It is for this reason that Shell implemented a detail system for regularly inspecting assets and the status of equipment–the focused asset integrity review (FAIR).


Technological advancements mean that corrosion management techniques are likely to move on in the 20 years that an oil field or gas reserve is fit for extraction.

Retrofitting devices is one way for the upstream oil and gas industry to keep up to date. A collaboration between FORCES technology and Deepwater Corrosion services earlier this year aims to increase innovation in this area, including advancements in cathodic protection—which is used with or without coating to protect subsea metals.

An example of when the companies' expertise has been put into action includes when FORCES technology was called in to inspect and retrofit the cathodic protection systems on the Tartan and Scapa fields owned by Talisman energy.

Using the Seacorr system, an advanced computer programme designed for modelling and design of offshore cathodic protection, the company was able to establish the need for retrofitting of anodes and/or impressed current and optimise the retrofit designs.

Torbjorn Sotberg, market director of FORCE Technology Norway, commented that the partnership will allow "projects to be managed effectively in a seamless way."

"Already in this initiation phase of the collaboration we see great interest from several offshore oil and gas producers," Sotberg added.

Technology which is being developed for the upstream oil and gas industry by the pair includes Subsea Cathodic Protection Monitoring Systems, a RetroClamp Subsea Clamping System and a Cathodic Protection Stabilization Mattress.