This blog first appeared in Industrial IoT/Industrie 4.0 Viewpoints

At GE’s recent Minds + Machines event, a number of oil & gas industry-specific challenges were discussed, accompanied by solutions designed by GE Oil & Gas to help the industry to meet those challenges. GE Oil & Gas also released a white paper entitled Asset Performance Management (APM) Overcomes Challenges in the Oil & Gas Industry , based on ARC researching oil & gas industry users to find out how to define and overcome the industry’s asset management challenges.  GE Oil & Gas has assembled a set of APM solutions powered by Predix based on the requirements identified in this white paper.

With lower energy prices and pressures to maintain profitability, the oil & gas industry faces challenges to reduce costs without increasing risks. In this cost- and human resource-constrained environment, companies in upstream oil & gas struggle to maintain regulatory compliance, ensure employee safety, maintain uptime, and sustain their aging assets.  This is problematic for the persons responsible for managing, sustaining, and improving asset availability, performance, utilization, and safety.  Simultaneously, as older employees begin to retire and the next generation of workers are coming on-board, the skills gap is hitting, since much uncaptured knowledge remains with those retiring employees.

Asset Management Challenges in Oil & Gas

Upstream oil & gas is an asset-intensive industry in which new wells are drilled and new production assets installed in increasingly remote and/or hostile locations on land, offshore, and the seabed. When something goes wrong without advance warning at these remote production sites, the parts and expertise needed to resolve the issues are not necessarily close at hand.  This can result in production downtime and can potentially create serious safety or environmental issues.

The research showed that at most upstream oil & gas production sites, scheduled maintenance is based on the calendar, run times, or number of cycles is routinely performed. To minimize unplanned production interruptions, this routine maintenance is usually done during planned maintenance outages.  Non-critical assets are typically allowed to run to failure.

Because different assets have different maintenance requirements and individual sites have different operating, process, and/or environmental conditions, performing routine maintenance this way often leads to unnecessary maintenance being performed.  Not only does this create unnecessary cost and effort, but when performing routine maintenance not driven by predictive analytics, often causes more harm than good regarding downtime and costs.

While leading oil & gas companies already monitor much of their large rotating equipment, they don’t necessarily employ effective business processes to take advantage of that monitoring. This reactive versus proactive response to issues and problems was another common denominator that ARC’s research uncovered. The problem is not a lack of data or software applications, but too much data without context and too many disparate and segregated applications.  Too much time and effort is required to collect, aggregate, validate, and analyze data.  This is due in part to too many different software solutions, poor integration between them, a lack of open standards for connectivity, and difficulty creating and maintaining these integrations.  Due to this lack of interoperability, there’s often no smooth flow of asset information from project engineering to the owner-operators’ operations and maintenance groups.  This is a key issue identified in ARC’s extensive research in APM and one that hampers operations and maintenance productivity costs at many oil & gas organizations.

Data and Analytics Help Improve Asset Management in Upstream Oil & Gas

The research showed that most oil & gas companies still tend to make decisions based on habitual ways of doing things, tribal knowledge, rules-of-thumb, and the opinions of in-house experts. This approach has worked well enough until now, but is becoming increasingly risky in today’s dynamic, information-driven environment, especially as these in-house experts retire.  Without data and analysis, suboptimal performance will likely continue and new options won’t become apparent.  A modern approach built on data collection and analysis enables companies to develop new techniques that result in greater efficiencies, improved safety, less unplanned downtime, better yields, less operational risk, and increased production flexibility.

Asset data provides value on multiple levels; both to help ensure uptime and to justify the value of maintenance activities and investments for which senior management often does not have visibility into. One way to deal with this is to use a common APM solution to collect, analyze, and visualize the data from all the critical assets.

Cloud Adoption in Upstream Oil & Gas

The research showed that it has become attractive for oil & gas companies to consider externalizing their IT infrastructure to cloud service models. The IT service delivery model extends outside the traditional data center located at a plant or corporate facility. Public cloud and hybrid cloud are moving in re-shaping the plans of plant staff, CEOs, and technology providers. With the cloud, oil & gas companies can minimizes common support headaches associated with plant software and related IT infrastructure, enhances agility, and offers capability to provide the underlying infrastructure for applications ranging from the well to remote locations on land and offshore, including resource-intensive advanced analytics and operational solutions.  Putting data and applications in the cloud also accelerates adoption of digital technology by simplifying the deployment options.  Finally, cloud-based data and application deployments enable intra- and inter-company collaboration and decision making.

Summary and Recommendations

These APM solutions, based largely on today’s increased connectivity and increasingly more capable platform for predictive and prescriptive analytics, enable oil & gas companies to move from largely reactive, conventional approaches for managing their critical production and automation assets to today’s far more effective proactive approaches. These are designed to maximize asset availability, performance, and utilization to help improve overall business, environmental, and safety performance across the upstream oil & gas industry.

Based on the challenges identified in this research, an effective APM solution should be both modular and scalable, as well as able to help users create and maintain an intelligent asset strategy based on equipment criticality and actual condition. It should ingest, validate, and manage large volumes of data; support use of advanced analytics to help predict critical equipment failures in time to prevent unplanned downtime or abnormal conditions, It should be built as a native cloud application; but deployed as a private cloud if this is more appropriate, and support robust security.

When well integrated into the larger automation and information environment with reliable, secure communications, today’s APM solutions can help companies take advantage of opportunities in shale oil and gas, ultra-deep water, subsea, and other “unconventional” upstream applications.

In addition, a wide variety of midstream and downstream applications can also benefit from securely integrating APM data with a variety of plant and enterprise applications.

Oil & gas companies can expect to reap benefits from APM. But at the same time, implementing APM typically requires significant time and effort as new work processes are developed, enabling technology is put in place, and employees are trained and adapt to a new way of looking after their instrumentation, systems, pumps, motors, compressors, turbines and other equipment assets.  Until recently, these systems have often been difficult to justify up front, but an investment in asset performance management can often provide a rapid ROI, especially with modern APM solutions.

Following the recommendations of this research, some of the APM solutions that GE Oil & Gas launched include Predictive Corrosion Management, a new APM solution that provides continuous inspection data and cloud-based analytics of pipe conditions. This can help operators manage corrosion-related risk, improve uptime, and minimize the total cost of operations. Predictive Corrosion Management couples GE’s Rightrax PM ultrasonic sensors with the Predix operating system to enable “digital inspection.”

Asset Performance Management (APM) Overcomes Challenges in the Oil & Gas Industry

Oil and Gas platform

Research Paper From ARC

Asset performance management (APM) can save companies in the oil & gas industry a significant amount of money by increasing maintenance efficiency and effectiveness, avoiding costly unplanned downtime, minimizing the need for scheduled downtime, and maximizing equipment availability, all while increasing safety. Read the report.


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About the author

Craig Resnick

ARC Advisory Group

Craig Resnick covers the PLC, PAC, HMI, OIT and Industrial PC markets as well as the Packaging, Plastics and Rubber Industries for ARC.  He is the primary analyst for many of ARC’s Automation Supplier and Financial Service clients.  Craig’s focus areas also include Production Management, OEE, HMI Software, Automation Platforms, and Embedded Systems.  Craig has 30 years’ experience in sales, marketing, product development, and project management in the industrial market, gained with major suppliers of PLCs, process control systems, power transmission equipment, and field devices.  Craig is a graduate of Northeastern University with an MBA and BS in Electrical Engineering.

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