The Issue’s Focus: Technology
How to Improve the Effectiveness of the Industrial Equipment of Oil Producing Companies
A. Portnov, managing partner of “A DAN DZO”
M. Platitsin, project manager of “A DAN DZO”
To ensure the smooth operation of the equipment is one of the most important tasks for any industrial enterprise. Even a small unplanned stop of an industrial complex, caused by failure of equipment, can result in significant financial costs and environmental issues affecting the company, nature and people.
In a climate of low oil prices, reduction of losses from industrial equipment downtime can become maybe not lifesaving, but a very tangible help to substantially reduced budgets of oil producing companies operating in Kazakhstan.
This article describes the experience of “A DAN DZO” consulting company in addressing the challenges of improvement in energy and compressor equipment efficiency of companies in the oil industry.
M. Platitsin, project manager of "A DAN DZO"
A. Portnov, managing partner of "A DAN DZO
It is no secret that the oil and gas industry is strategic for many countries. Including Kazakhstan, because out of the $80 billion that the budget of Kazakhstan receives annually from exports, up to $55 billion comes from the oil sale revenues.
The economic crisis, including lower oil prices in 2015 in dollar terms for more than 2 times, affected not only the revenues of the State, but more significantly the revenues of oil and gas companies. Even more so, the purchase of high-quality oil and gas, and oil field supporting equipment happens abroad. This fact, in turn, assigns the task for engineering services for the most efficient use of already functioning equipment, prevention of crashes and breakdowns.
It is important to not only to eliminate hardware failures, bringing to a standstill the whole field, but also to create the institutional foundation of the company, that is capable to serve as a basis for further development in the difficult external conditions.
"Obvious" causes of failures
According to the statistics of the producing companies, the most common cause of the unscheduled stops in production of oil and gas at the field is a failure of power equipment, caused by the following events (Fig. 1):
Figure 1. Causes of unplanned shutdowns of oil and gas productionFigure 1. Causes of unplanned shutdowns of oil and gas production
Thus, when investigating the failures that are causing the stoppage of the production at the fields, special attention is given to the work of generating equipment and electrical grid. But is it possible to say with certainty that "poor quality" equipment is to blame (59%) or staff (17%) that works directly on the field and in fact performs a process that brings income of the whole oil company?
If you approach the issue "superficially", then yes, of course, staff is to blame, one that failed to ensure the smooth operation of the equipment. And if you start trying to figure out what was the real (root) cause of the stoppage of the whole field, then the answer is not so obvious.
Meanwhile, due to hardware failure, the oil company can annually lose from 1% to 3% of oil production.
Identifying root causes of failures
One of the ways out from the existing situation can become a project initiated by the oil company that defines its primary purpose as improvement of the effectiveness of the equipment operation in the field.
Based on our experience, this project could not be implemented using company's own resources. The matter is that in determining the root cause of equipment failures there is a possibility of background for internal conflict of interests, that will not allow staff members to provide qualitative elaboration of project tasks. Therefore, project results will not meet the requirements and will poorly affect the improvement of the efficiency of the equipment.
The optimal solution is an invitation of the professional contractor (a specialized consulting company), capable to promptly and impartially look into the situation, to identify bottlenecks and issue a clear analysis of the current situation in the field to the management of oil and gas company. And most importantly - to offer “a road map” for improvement of the effectiveness of the equipment operation, that contains events, parties responsible, deadlines and required investments, as well as the projected economic impact of implementation.
As practice shows, problems associated with the inefficient work of equipment in the oil and gas industry, and in the food industry, and in the atomic energy, as well as other industries - all are of a similar nature. Moreover, the experience of other industries can be quite useful when solving problems of equipment operation optimization in the oil industry.
Interesting fact: The first gush of Kazakhstani oil started its life at the Karashungul field in November of 1899. In other words, oil in Kazakhstan began to be produced at the the end of 19th century, much earlier than in Iran, Kuwait, Mexico, Norway, Saudi Arabia.For the thorough analysis of the reasons causing hardware failures, it is necessary to examine the key areas of activity of the oil producing company, one way or another affecting the operation of power equipment, paying a close attention to cross-functional interaction. These are the subdivisions and processes related to:
- design and commissioning of the equipment;
- organization of the equipment operation;
- maintenance and repair;
- the personnel management system - both its own and contractor’s;
- automation of equipment operation processes;
- purchase of spare parts and tools;
- and others.
It is only possible to understand the root causes of failures in the equipment operation when you examine all listed fields of activity as a whole. Otherwise, the analysis will be incomplete, and activities aimed to improve the efficiency may not give the desired result.
Identification of root causes of hardware failure
There are many methods and techniques for analyzing information. But in this case the most optimal, in our opinion, is the method of "5 why" proposed in the thirties of the last century by Japanese industrialist Sakichi Toyoda.
The main point of the method is that if a failure occurs, you have to ask the question "why it happened?" five times. Once each "why?" is answered, the root cause and the solution of the problem becomes apparent.
An example of such analysis is the examination of the real failure of power equipment, disconnecting the whole field:
- 1. Why there was a failure in the work of generating equipment? Because cutout fuse failed (this element protects the transformers).
- 2. Why the failure of cutout fuse has occurred? - Because the preventive maintenance was not carried out in due time.
- 3. Why the preventive maintenance was not carried out in due time? - Because it is impossible to disable the power equipment without disconnecting the whole field.
- 4. Why is it impossible to disable the given power equipment without disconnecting the whole field? - Because of lack of the spare capacities.
- 5. Why there is lack of the spare capacities? - Because the investment plan did not include the introduction of new energy capacities in a given period of time.
As a result, the hypothesis of the root cause of failure is the incomplete work during the process of the field development scenarios. Subsequently, it remains to be seen whether this omission an accident, or it is already a system, included in the design algorithm.