This post first appeared on LinkedIn.
Unplanned downtime continues to plague the oil and gas industry. The offshore sector, in particular, has been saddled with unnecessarily high costs and exposed to unnecessary risks as a result. And the problem is only going to get worse as budget cuts, aging assets, and the loss of industry experience (“the great crew change”) take their toll.
A recent study by Kimberlite, a market research and analytics firm serving the oil and gas industry, quantified the impacts and pointed the way towards a solution.
The study revealed that:
- Offshore oil and gas operators experience on average $49 million annually in financial impacts due to unplanned downtime. For the worst performers, the negative financial impact can be upwards of $88 million.
- Fewer than 24% of operators describe their maintenance approach as a predictive one based on data and analytics. Over three-quarters either take a reactive or time-based approach.
- Operators using a predictive, data-driven approach to maintenance experience 36% less unplanned downtime than those with a reactive approach. This resulted in, on average, $17 million dropping to the bottom line annually.
- The Kimberlite study clearly shows that updating maintenance practices to become more predictive — driven by digital technologies and data — can enable offshore production facilities to reduce their unplanned downtime. The technology used to achieve these results is referred to as asset performance management (APM) and includes:
- Efficient and effective collection, management and visualization of data related to equipment condition and performance.
- Utilizing existing industry knowledge and applying advanced analytics to become more predictive.
- Implementing optimization tools to create and maintain a financially-optimized maintenance strategy.
In a world of low oil prices operational excellence is a requirement for success and reducing unplanned downtime is a cornerstone of operational excellence. Given the correlation between the two, executives responsible for offshore operations should work with their technology teams to create a digital strategy with a focus on APM.
To learn more, download the full study here.