In the oil and gas industry, asset management has traditionally been associated with multidisciplinary teams making decisions on the exploration, development, and production strategy for an oil field. Essentially, the approach is heavily results-driven and modeled on the financial services sector, where the term originates. That definition of asset management has morphed into a more detailed engineering-style approach to every component of a project’s operation over the whole life cycle, drawing in contractors as well as equipment and service suppliers.

The difference is probably best emphasized when reference is made to asset integrity management, which puts the responsibility more obviously on physical assets employed on a project. It implies that managers have to closely monitor and coordinate the optimal operation or integrity of their assets to maximize productivity while ensuring that safety is the number one priority.

Today operators, contractors, and suppliers are moving into a new era of asset management that challenges them to work more closely together as a team so that no player is left out of the loop, no aspect of the operation is taken for granted, and improving the overall process is the watchword. This is partly a result of the evolution in the definition of asset management but does not necessarily mean that current practices are not covering most of the bases.

ISO certification

fluid end repair

The fluid end repair is one of the most critical pieces of equipment that must be maintained. (Image courtesy of Weir SPM)

The definition of what asset management entails has been the subject of international discussion in recent years, with some positive outcomes in terms of clarifying its requirements and adding substance to the discipline. In 2004, the UK Institute of Asset Management, in conjunction with the British Standards Institution, developed PAS 55, the first publicly available specification for optimized management of physical assets. It describes asset management as “systematic and coordinated activities and practices through which an organization optimally manages its physical assets and their associated performance, risks, and expenditure over the life cycles for the purpose of achieving its organizational strategic plan.”

The 2008 update (PAS 55:2008) was developed by 50 organizations from 15 industry sectors in 10 countries. The International Standards Organization (ISO) has now accepted PAS 55 as the basis for development of the new ISO 55000 series of international standards, due to be published in 2014. The whole process has strong parallels with the introduction of the ISO 9000 quality management system standards more than 20 years ago.

Macondo

In North America, the perspective on asset management has, of course, been significantly altered by the Macondo factor. The 2010 disaster in the Gulf of Mexico focused public attention on the management of potentially hazardous infrastructure in the event of failure and whether the systems in place provided sufficient safeguards. In the aftermath, the relationship between operators, contractors, and supply companies has been a key point of interest. The industry is now in a period when new standards of compliance for the US oil and gas industry are in the process. Following the Deepwater Horizon event, the Bureau of Ocean Energy Management created a regulation that requires operators in the US Outer Continental Shelf to develop and implement a safety and environmental management system. In November 2010, the entirety of the American Petroleum Institute’s Recommended Practice 75, “development of a safety and environmental management program for offshore operations and facilities,” introduced in 2004, became a mandatory requirement.

The situation is somewhat analogous with the raft of regulations governing operations offshore the Northwest European Continental Shelf, which were introduced following the Piper Alpha disaster in 1988 and the recommendations of the subsequent official inquiry contained in the Cullen Report (1990).

In this changing environment, the objective for equipment supply and service companies is to make certain internally that the equipment they supply meets the highest standards and specifications. At the same time, they have to be proactive in assisting clients in monitoring performance and identifying and implementing the best solutions going forward. Weir SPM’s specialization for the upstream oil and gas operation is the manufacture of high-pressure well service pumps and related flow-control equipment along with repairs, parts, and service of pressure control and upstream rotating equipment. As such, it provides oil companies and major service companies around the world with vital assets for their operations on a 24/7 basis, which it and its customers both have to manage and sustain, something best achieved by close collaboration.

Asset management

In recent years, Weir has placed increasing emphasis on its asset management practice and its staff training on partnering with clients. One of the challenges has been to avoid the silo mentality, where communication about the role of equipment and services is walled off from related aspects of the project to the potential detriment of optimal use. Roundtable reviews, which include oil company operator, contractor, and supply representatives, tend to have the most positive outcomes.

Although the company’s understanding of the terms may change over time, optimal asset management for an equipment supplier to a large extent still boils down to having effective maintenance systems in place and personnel with the training to execute them. All the old virtues of tracking and traceability of equipment still apply; much of it is already subject to regulations and standards that responsible companies endeavor not just to meet but to exceed.

Among other things, this is a big information management deal. An example is Weir’s Iron Man asset management software program used for flow-control equipment. When assessing the refurbishing requirements for certain equipment materials, the relevant sections of the manual include instructions for an inventory check, visual inspection, wall thickness inspection, disassembly and assembly, magnetic particle inspection, pressure testing and deadhead testing, paint assessment, and final inspection, plus reports on the work order service history and Iron Man certificate of compliance. Essentially, all equipment must have an identifiable recorded history of its original construction, installation, periodic and mandatory testing, servicing, etc. This is a matter of safety, reliability, and performance as well as one of providing transparency and accountability should an incident occur. It also is about inventory control. For example, in Weir’s Willis-ton, N.D., service center, it stocks multiple replacement parts. A local oilfield services company recently needed a replacement TWS 2500 pump. By having the equipment on the shelf as spare parts, support saved at least four days of getting parts shipped from the main warehouse in Fort Worth, Texas, representing a major savings in downtime.

Weir is addressing the need to automate as many of these functions as possible to deliver increased efficiencies in project asset management programs. With more data, it also is possible to provide customers with better costing and scheduling estimates for equipment and consumables, all of which can improve the bottom line. This includes working with the customers in analyzing the timing of an asset reaching its minimum standards for safe operations.

The key to improving asset management strategies will always come down to forging a partnership approach in which everyone involved consciously works together toward the same objective, with no participant left behind.

The key to improving asset management strategies will always come down to forging a partnership approach.