R.M. Chandima Ratnayake

Associate Professor of Mechanical Engineering

(Inspection, Maintenance and
Asset Integrity Management)
Department of Mechanical
and Structural Engineering
and Materials Science

University of Stavanger

chandima.ratnayake@uis.no

Tore Markeset

Professor of Mechanical
engineering (Operations and
Maintenance),
University of Stavanger

tore.markeset@uis.no
Norway

The concept of ‘sustainable development’ addresses how to exploit industrial assets to earn returns on investment without endangering societal safety and the natural environment. Conventionally, asset performance is evaluated based on financial returns. Practice and research evidence reveal that such evaluations are somewhat inaccurate. Also, sole reliance upon financial evaluation methods is suboptimal in determining the performance of industrial assets. Industrial organizations are apathetic about implementing responses to sustainability concerns due to the lack of the right assets in the right place at the right time. This is reflected in the fact that trying to reach sustainable and balanced performance is seen as disturbing the business profitability equation and considered as a ‘necessary evil’ to reduce stakeholder pressure instead of being viewed as a business opportunity [1].

Asset Integrity Management (AIM) – i.e. the acquisition, exploitation, maintenance, modification and disposal of critical assets and properties – is vital to the sustainable performance of most asset-intensive businesses. When the industrial operations become more asset-intensive then the corresponding business performance is more tied to the availability, maintenance, and deployment of assets. ‘Sustainability’ has become a catchword within natural resource-dependent industries [1]. The successful implementation of an asset integrity management (AIM) system requires a holistic, systematic, systemic, risk-based, optimal and sustainable view of how assets are planned and exploited from the inception of an idea to design (commission, operation & maintenance and modification & life extension) and decommission [2]. In this context, the aforementioned terms are clearly defined in the publically available specification (PAS) (published by British Standards Institution (BSI)) and the PAS provides specification and guidelines for asset management [2]. However, the specifications provided in PAS 1&2 are prescriptive only to the extent that they define what has to be done, not how is to be carried out. Hence, it is vital that an organization selects the necessary tools to align its assets with its assessed needs.

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Figure 1. Asset integrity management: current trends and future orientation.

‘Corporate sustainability’ is an umbrella term for a set of structural changes that impact corporate strategy and performance. In general, sustainability or sustainable development is realized when the industrial asset exploitation level “meets the needs of the present generation without compromising the ability of the future generations to meet their own needs” [3]. However, within the context of AIM, sustainability does not mean sustaining the integrity of particular assets indefinitely; but rather meeting the needs of the global society safely at a reasonable cost, and with minimal impact on the environment until alternative assets are available, and current assets are decommissioned in a sustainable manner [1]. Recent reported incidents reveal how unsustainable asset-intensive organizations are in connection with assets deployment. For example, “the Deepwater Horizon had never been to dry dock for shore-based repairs in the nine years since it had been built” and “lack of time in dry dock may have resulted in a lapse in BOP (Blowout Prevention) certification” [4]. This and other factors caused the Deepwater Horizon to suffer a major incident in the Gulf of Mexico. As a result, there was loss of human life, high-level environmental pollution and societal burden to the people living within the proximity. In addition, the leading O&G operator company BP suffered substantial economic losses. The investigations reveal that “the Deepwater Horizon did not go to dry dock because Transocean insisted on being paid its daily rate during repairs” [4].

Apart from that, the asset performance of global companies may differ from region to region as deployment practices differ [5]. For example, since 1996 Shell has broken its promise to stop gas flaring in Nigeria, which is the biggest contributor to climate change in sub-Saharan Africa. Moreover, “Shell refuses to implement the 2011 deadline imposed by the Nigerian government for phasing out gas flaring and is now speaking about a 2013 phase out” [6]. Continuous oil spills in the Niger Delta, where Shell is responsible for about 50 percent of petroleum production, reveal [7] how the company is operating in an unsustainable manner when they get the opportunity by not employing the best available technology (BAT) and practices that they use elsewhere in the world.

The concept of ‘sustainable development’ (and triple bottom line) [8] addresses how to generate a return on investments without endangering the natural environment and societal safety, i.e. making a profit while assuring health, safety and environment (HSE). Additionally, strategic performance management approaches, such as ‘Balanced Scorecard (BSC)’ and ‘strategy maps’, address how managers can keep track of the execution of activities and to monitor the consequences of their actions [9, 10]. This manuscript provides an overview of how the aforementioned developments can be incorporated into an AIM process to reach a sustainable performance level via the guidance provided by the asset management specifications PAS 55-1&2.

AIM to Align with PAS 1&2: Current Trends and Future Orientation

Within the oil and gas (O&G) industry, AIM is generally carried out to maintain the assets’ ‘fitness for purpose’ [11]. Basically, inservice inspections are carried out to recognize the integrity failures at plant level. Furthermore, it is crucial to carry out continuous integrity assessment in order to assure that the data from inspection, monitoring and testing are evaluated against the need for mitigation, intervention, or repair [11]. If it is possible to assess the integrity, then it can be managed [13]. However, this is not always done. For example on the British continental shelf, the Key Programme 3 (KP3) report from the British Health and Safety Executive organization in 2010 stated that the influence of the engineering function in the oil and gas industry had declined to a worrying level as a result of technical authorities being under pressure, often reacting to immediate operational problems rather than taking a strategic view to provide expertise and judgment on key operational engineering issues [12]. Also, KP3 reveals that, “…senior management in the industry had failed to adequately monitor the status of asset integrity” [12].

The concepts of ‘sustainable development’ and ‘balanced scorecard’ (along with strategy maps) are possible candidates for framing the AIM process with balanced performance. In this framing process, PASS 55 1&2 can provide specifications and guidelines to make sure that all the sustainable dimensions are incorporated whilst seeing through the AIM lenses. In this context, it is possible to employ tools depending on the asset-intensive organization’s requirements (see Figure 1), such as: aligning the smaller scale operational activities with its larger-scale objectives; synthesizing industrial data, experiences, intuitions and intentions; and measuring the organizational alignment vertically and horizontally [1, 14]. Figure 1 illustrates current trends and future orientation toward AIM for sustainable performance and the possibility of using PAS 55 1&2.

Role of the Human Factor and AIM in Sustainable Performance

In practice, the concept of integrity is mostly understood as a characteristic that only human beings can have [15, 16]. However, the concept of integrity is surfacing in industrial practices based on the community/neighbourhood that the particular industry belongs to. The operationalization of integrity at different levels of an organization remains vague, although management gurus such as Stephen Covey, Peter Drucker, and Manfred Kets de Vries treat integrity as the quality of management [17]. For example, when it comes to the oil and gas industry, the integrity is assured when maintaining the pressure- containing envelope or, in simple terms, keeping hydrocarbons inside the pipes and vessels. The NORSOK D-010 standard [18] describes well integrity as “the application of technical, operational, and organizational solutions to reduce risk of uncontrolled release of formation fluids throughout the life cycle of the well”.

However, Figure 2 reveals why human intelligence cannot be replaced with technologies, technological systems or sub-systems [19]. The figure illustrates that 80 percent of unwanted events are caused by human error and 70 percent of the human errors are caused by organizational weaknesses, whilst 30 percent are caused by individual mistakes. In other words, more than half (56 percent) of unwanted events are caused by organizational weaknesses leading to human error, and only a quarter (24 percent) of unwanted events are caused by individual mistakes leading to human error. Hence, it is apparent that focusing efforts on reducing human error as well as organizational weaknesses can increase sustainable performance. Furthermore, a research study claims that “although the immediate causes of major incidents frequently involve ‘human error’ of operators or maintenance personnel, the reasons that these errors occurred in the first place were the responsibility of those more senior in the organization” [21].

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Figure 2. (a) The contribution of the human errors and equipment failures leading to unwanted events; (b) The contribution of the organizational weaknesses and individual mistakes leading to human error (adapted from [20]).

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Figure 3. Relationship between critical kinds of assets and AIM.

Hence, it is logical to interpret the role of human assets as indicated in Figure 3, concerning the AIM and connection between other critical kinds of assets [2]. In this context, to understand the whole picture of overall asset integrity, it is vital to split it up into design integrity (DI), operational integrity (OI), technical integrity (TI). These may be defined as: DI – “assurance that facilities are designed in accordance with governing standards and meet specified operating requirements”; OI – “appropriate knowledge, experience, manning, competence and decision making data to operate the plant as intended throughout its life cycle”; and TI – “appropriate work processes for inspection and maintenance systems and data management to keep the operations available” [22]. Furthermore, gap analysis is proposed to align the organization to balanced and sustainable performance (see Figure 3) in relation to the specifications and guidelines proposed in the PAS 1&2. Usually, the focus of operator companies is the final product and the consequences in relation to the production process. The engineering contractor companies fabricate and manufacture required physical assets, provide consultancy services (e.g. operation, maintenance, modification and life extension) and perform inspection, maintenance & modifications.

The gap analysis enables a comparison to be made between the skills needed to deliver the uncertainties about asset behaviour, future requirements, performance values, costs and risks and the typical training or education required for the personnel involved with asset operations. This would also enable the following to be recognized: How many engineers and managers have sufficient business, financial, communication and sustainability awareness? How many managers are scared of retaining and/or recruiting an employee with a higher level of education and knowledge than their own? How many employees are working in the wrong cadre in the wrong place at the wrong time? Why do organizations continue to treat engineers, operators and technicians as (skilled) hands, rather than as also having brains and very sophisticated sensors? The answers to all the above questions would reflect how unsustainable the asset-intensive organization is. Physical assets are related to financial, intangible and information assets, which all are controlled and managed by human assets. A mistake made at the human assets level would definitely reflect in one of the others.

Conclusion

The focus and application of asset integrity management has varied considerably, not only between different industries, but also between organizations (and different geographical locations) within the same industry. PAS 1&2 provide common specifications and guidelines to manage the assets in a holistic way. However, each individual organization should search for the best tools to implement those specifications and guidelines.

In this context, human assets dominate, as they cannot be replaced with so-called latest technologies, technological systems or sub-systems. Hence, it is vital to manage the change to reach the sustainability level by assessing current performance and assigning the right personnel in the right place to carry out the right job.

»»Who are the authors? Dr. R.M. Chandima Ratnayake is an Associate Professor of Mechanical Engineering (Inspection, Maintenance and Asset Integrity Management) at the University of Stavanger. He received a BSc degree in Mechanical (specialized in Production) Engineering and MSc degree in Manufacturing Engineering from the University of Peradeniya Sri Lanka and PhD degree in Offshore Engineering University of Stavanger, Norway. He served as a Senior Engineer in AkerSolutions Offshore Partner from 2009 to 2011 in Stavanger, Norway. He also served as a visiting Associate Professor and Assistant Professor from August 2007 to July 2010 in the University of Stavanger, Norway. His research interests include inspection and maintenance engineering, industrial asset integrity management, study degradation mechanisms and inspection planning of offshore assets, performance measurement, implementation of sustainability concerns at plant level asset operations, production and manufacturing technology and Six Sigma Quality Management. Ratnayake has published number of book chapters as well as journal and conference papers in international journals and conferences.

Dr. Markeset is a Professor of Mechanical Engineering (Operations and Maintenance) at the University of Stavanger and Adjunct Professor in Operation and Maintenance at University of Tromsø, both in Norway. He received a BSc degree in petroleum engineering from the University of Stavanger in 1985, a BSc and MSc degree in mechanical engineering from the University of Minnesota, USA in 1989 and 1991. After working in the industry for a number of years within process, mechanical and reservoir engineering, he attained a PhD degree in Offshore Engineering – Operations and Maintenance from the University of Stavanger. His research interests include: industrial services (product support, innovation, strategy development, sourcing strategies, contractual relationship performance, subsea services, etc.) and industrial asset management (operations, maintenance and support management, design for performance and production performance management). Markeset has published more than 100 papers in peer reviewed journals and international conferences.

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