Oniqua Intelligent MRO Blog

Planning for Offshore Asset Decommissioning

Posted by Steve Pak

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5/6/16 9:31 AM

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Planning to decommission offshore assets is a difficult, complicated and potentially expensive undertaking. While the asset is still in operation, the production integrity and safety of the staff is paramount. The operator has a full range of maintenance, repair and operations (MRO) inventory which supports the efficient and safe operation of the asset at full capacity. This inventory has a wide range of usage, demand, availability and criticality.

As we move towards the end of production or Cessation of Production (CoP), operators will need to identify the equipment and systems that are critical - those that will need to be operating on the last day. Apart from the operational production equipment, there is a plethora of support systems such as fire detection, lifesaving equipment, helipad and lights, etc. that will also need to be at fully operational with relevant spares available in inventory.

Typically, operators have identified that the value of their MRO inventory has been rising each year. Prior to the oil price reductions of recent times this did not seem to be a major issue as production was king. However, now there is financial pressure to control and reduce operating costs - especially as an operator moves towards the end of life of a platform.

During decommissioning, operators need a method to move from their current inventory levels through a range of operational reductions and rundowns to maintaining only the stock that is needed at CoP. Inventory optimization software, such as Oniqua Analytics Solution (OAS), can help operators to optimize their inventory and identify obsolete, surplus and dead stock as well as guide their stocking policies to help improve maintenance efficiencies and reduce operational costs and risk.

It is important for the operators to identify the equipment and item criticality as this will feed into the assessment of what inventory needs to be maintained until the end of production. With the addition of a decommissioning date in the near to medium future, the asset can potentially have its production capabilities reduced in stages as the operator moves towards CoP. The requirements for inventory support will need to be optimised in accordance with the changes in operation equipment functioning on the platform.

There is a financial benefit to reducing the inventory by identifying obsolete, dead stock as well as surplus inventory. Obsolete stock can be scrapped or potential sold. However, the surplus stock has a much higher value and can be returned to the vendor, redeployed to other operations within the group for reuse, kept for future re-start of platform/production (only applies if it is a temporary shutdown) or sold elsewhere in the world via asset disposal and recovery services.

Accurate equipment criticality allows a maintenance organization to prioritize and assign resources to address equipment failures in a proper order to minimize production loss.  Additionally, the spares criticality can also be assessed accurately by utilizing equipment criticality of where item is used. Conversely, obsolete inventory can be more easily identified if the criticality of the equipment for which it is used is known.

Learn more about smarter onshore and offshore warehouse management for upstream oil and gas operations in our Executive Brief: Rationalize Maintenance Inventories with Analytics.

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Topics: inventory management, asset management, decommission assets

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