Asset information management for offshore platforms

Sid Snitkin
ARC Advisory Group

Good asset information is fundamental to good asset performance. Everyone involved in operating and maintaining an offshore production platform needs appropriate asset information to do his or her job. For optimal performance, this information has to be complete, accurate, and comprehensive to support a multitude of questions about the asset’s creation, use, and care. Access to the information must also be convenient so that people can use it to make good decisions.

Studies have identified poor asset information management (AIM) as the root cause of many asset performance problems, such as poor asset utilization, low maintenance efficiency, high MRO costs, and others. ARC estimates the costs of poor AIM for a typical asset-intensive organization to be 1.5% of sales revenues – a staggering burden for any company today. Poor AIM also increases the risk of safety, health, and environmental incidents, which can jeopardize an enterprise’s very survival.

While the opportunity for improvement is incredible, many organizations continue to suffer the pains of poor AIM. Some don’t recognize the opportunity. Others understand that they have problems, but don’t know how to solve them or can’t justify the required investments.

Value of good AIM

Every organization, regardless of how well it manages its operations, should consider AIM as a significant opportunity for improvement.

Our research indicates that better AIM can improve the performance of most facilities, both financially and otherwise. Furthermore, the typical asset-intensive facility can reap annual savings equal to 1.5% of its sales revenue.

Better AIM represents a staggering opportunity, especially for large organizations in industries with distributed operations, such as offshore energy production, as these organizations can implement enterprisewide AIM strategies. However, as the savings are annual, even smaller organizations can benefit by including AIM in their continuous improvement programs.

To assess the financial impact of poor AIM on production asset performance, every company must consider three different areas – revenues, operating and maintenance costs (OPEX), and the capital costs of modifications and upgrades (CAPEX). Poor AIM significantly impacts all three and the effects are cumulative with respect to overall financial performance.

Comparing ARC’s estimates of the potential economic benefits with related studies indicates that losses due to AIM may be even larger than we’ve estimated, clearly supporting our call for immediate action.

While we’ve focused largely on the financial benefits up to this point, it is important to recognize that a good AIM strategy can improve asset performance across all performance metrics, including EH&S (environmental, health, and safety) and sustainability. Too often, organizations discount non-financial performance benefits when evaluating IT opportunities. In the case of AIM, a good strategy can help the organization avoid significant financial penalties and other effects that might jeopardize the organization’s reputation and very survival.

Asset information categories

Energy companies have many kinds of assets. ARC’s ALM research focuses on one specific class of assets – the facilities, technology, and infrastructure that organizations acquire to service their stakeholders.

Normally, the distinguishing feature of these kinds of asset investments is that they are physical (as opposed to financial, intellectual property, brand image, etc.). But they also include significant investments in people to operate and maintain production assets (offshore or onshore) and the best practices needed to ensure that they do so efficiently and effectively. Further, these complex investments have long lifetimes and span a series of lifecycle stages, including plan, design, procure, install, commission, operate and maintain, modify, and retire.

With this understanding of “asset,” we define asset information as all information created about all the organization’s assets throughout their lifetimes, including information about physical entities, people, and processes.

Enabling people to understand and manage their “real” assets is challenging and means that asset information has to encompass a wide range of information. Ideally, it will be able to support any reasonable question about any asset from any valid stakeholder, whether part of the organization or part of the organization’s APM ecosystem. This includes questions about the physical asset; how it should be used and cared for; and how it was created, used, and cared for in the past so performance can be analyzed and improved.