Since the oil crash of 2014, it has become increasingly important for oil and natural gas operators to review the value of their assets, and to manage their integrity. Developing an asset integrity management (aim) system helps operators to evaluate their business situation, offshore and onshore, and to enhance productivity. AIM systems ensure that companies are able to maintain the integrity of their assets while adopting cost-effective methods. Having a clear AIM system allows companies to optimize operations, and to ensure safety through analyzing their equipment, infrastructure and workforce.
AIM in the Oil and Gas Sector
As global oil prices dropped in 2014 and remained low until 2017, oil and gas leaders began to introduce AIM systems to improve their work efficiency. The Egyptian oil and natural gas industry now has a growing need of a more sustainable workplace that reduces risks, generates value, and aligns with health, safety and environment (HSE) considerations. Integrity threats are growing as the technologies used in one project increase.
Operators need to introduce an AIM program that measures design, technical and operational integrity; one that maintains their assets without risking the project’s objectives. Within an oil and gas company, assets that require integrity management include production facilities, equipment, the workforce, and infrastructure.
“All high-risk assets should be managed with such a system. Risks to people, process, environment, reputation and cost shall be considered,” Abdelaziz Khedr, Senior Asset Integrity Planning Engineer at Egyptian LNG, told Egypt Oil & Gas. “Drilling rigs, offshore platforms, pipelines, refineries, petrochemical plants, LNG trains, gas plants and even fuel stations all have high risks and shall be governed by some level of AIM recommended practices based on the relative risk impact levels,” he said.
For any oil and natural gas operation, having an AIM program in place is key for developing the business. Leaders must understand how asset management affects the company’s operations, expenditure, productivity levels and long-term planning. Moreover, conducting due diligence is a crucial part of assessing the company’s current AIM performance and understanding how asset management can be improved in the future.
Maintaining Asset Integrity
Whenever asset failure occurs, the company first should identify the cause. Inspections and analysis should then be carried out, and a plan should be made to maintain the asset in the future. Upon implementing the plan, the company should monitor the process and results in an effort to continue either improve its performance or reduce the risk of failure.
AIM systems operate by inspecting different assets in order to estimate their lifespan and calculate what is required for their maintenance. One of the approaches to achieve this is risk-based inspection (RBI), which prioritizes inspecting equipment, assets, and components. This approach is conducted through the use of inspection data and past operating conditions in order to make strategic predictions and identify risks before failure occurs. The RBI inspections are focused on engineering analysis and centered on assessing the potential for failure.
“Asset integrity allows [the Egyptian industry] to get optimum reliability and inherent safety levels starting from the design, fabrication, installation, commissioning, to maintenance and operations, as well as de-commissioning stages,” Khedr said.
“The practices of asset integrity all over the asset’s lifecycle allow the [oil and gas] plants to also run in a cost effective way through the profitable operation and the additional life it gives to the asset,” he added.
Managing the workforce effectively is another cornerstone of a sound AIM program. Companies should consider the age demographic of employees to avoid both having an aging workforce and one that is predominantly young and inexperienced. Moreover, an AIM program should try to reduce the rate of employee turnover, which can bring instability to oil and gas operators.
AIM and Digitization
Sharing experience in exploration and production (E&P) of oil and natural gas helps the country decrease costs and enhance output. The Egyptian Ministry of Petroleum’s Modernization Program includes pillars for supporting decision-making and improving data flow. “In Egypt, the ministry’s oil and gas Modernization Program is clearly based on the vision that harnessing data and leveraging new technologies will improve operations and drive the next level of productivity for Egypt,” Matthias Heilmann, President and CEO of BHGE Digital Solutions, previously told Egypt Oil & Gas in an interview.
A key part of this pillar is the development of a shared data bank. In February 2018, the ministry signed an agreement with Schlumberger to establish a database of E&P activities which aims to promoting and facilitate E&P tenders.
The website would help digitizing the Egyptian oil and gas sector, which “is a key enabler of maintaining a sustainable AIM system since AIM requires the involvement of technical, operational and financial teams, which result in huge set of inputs and outputs that require the assistance of technology and digitalization,” Dr. Mohamed ElHabbal, an AIM expert, told Egypt Oil & Gas.
Moreover, having a shared databank would help the Egyptian industry as it will “ spread out and highlight perfect implementation practices, and show mistakes that are a precious opportunities for improvement,” said Khedr, adding that a “shared databank will give [the industry] the opportunities to optimize the building and operation of new assets.”
The Egyptian oil and gas sector is prioritizing workforce development in its Modernization Program due to its critical role in the oil and gas sector. “Personnel training, and empowerment is crucial to implement a successful AIM system,” explained Dr. ElHabbal. “People are the brain of the system and they are responsible for designing the system, implementing the system and ensuring its sustainability,” he said.
Well-trained employees are vital for managing asset integrity as they take decisions related to the AIM programs, its budgets, and implementation, according to Khedr.
The ministry is keen to develop its people through training young professionals and helping them build their own career path to reach measurable and realistic goals.
Moreover, the ministry empowers the oil and gas sector’s employees through providing them with equal opportunities, removing gender disparity in the workplace, and encouraging women to take the lead and reach managerial positions.
Egypt’s oil and gas infrastructure has become even more important in recent years given the government’s plan to transform the country into a regional energy trading hub. The government is keen on developing the existing infrastructure and establishing new infrastructure that develops oil and gas production, and treats, distributes and markets hydrocarbons.
Egypt has a wealth of infrastructure, including production facilities and units that are important to treat produced oil and gas. Developing these facilities and establishing pipelines that connect these facilities to nearby fields is important because it saves time and money spent on transportation.
Egypt is also developing its import terminals and is constructing a subsea pipeline to enable Cypriot natural gas to reach its liquefaction plants. The Idku and Damietta liquefaction plants are designed to liquefy natural gas so that it can be exported via ship. The country is working on developing the plants and on settling a $2 billion fine in an arbitration case with Union Fenosa in order to be able to re-open the Damietta plant.
AIM for the Future
Egypt can develop its petroleum sector through setting AIM programs. The Modernization Program is developing the sector’s assets and managing their integrity. Khedr tells us that further sector-wide initiatives may better help the industry manage its assets and reduce risks. He recommends “a Supreme Council of Asset Management responsible for the standardization of asset management practices in addition to setting the strategies and requirements.” By ensuring asset integrity, the government, local companies and international firms can be certain that the oil and gas industry is well maintained, produces high quality hydrocarbons, and preserves the health and safety of workers, as well as the environment.