Making the right decision about aging oil and gas facilities

7 Sept 2011

Aberdeen: DNV has developed a rapid, semi-quantitative method for evaluating asset condition, including a prioritisation of risks and works required, for aging onshore and offshore oil and gas facilities. Put to the test in both Africa and Europe, the aim is to support the investment or divestment decisions that often occur when such facilities near the end of their design life.

As the North Sea oil & gas province matures, more assets are changing ownership to “tailend” producers who are more able to take advantage of advances technology and gain investment for subsea tie-backs to extend feasible production. This consequently creates a challenge as the facilities will need attention to continue to operate safely and economically, usually beyond their original design life. A rapid evaluation of the physical condition and capability to continue safe and effective production is often required to support due diligence, to assist in price negotiations and to meet regulatory requirements.

Speaking at Offshore Europe 2011, DNV’s Marcus Flint gave a presentation on how the situation can be handled effectively by a small team of DNV specialists. “A semi-quantitative approach is sufficient in many cases to make the major decisions necessary to support CAPEX and OPEX budgeting for continuing operations,” says Mr Flint. “Inputs to DNV’s methodology are taken from a combination of historical operations and maintenance records, on-site examination of equipment and the direct experiences of selected site personnel.” With a small team of people, the work can often be completed within four to six weeks, providing parties with an objective assessment of condition and where investment will be required.

In recent assignments involving examination of facilities over 18 years of age, DNV has found that about 7-15 per cent of the equipment and structures require work as a high priority. Even though conscientious operators may already have some of these included in a remediation plan, a new operator taking over may be less aware of where they really need to focus.

The most recent project conducted by DNV was an offshore facility in sub-Saharan Africa where a team addressed eight disciplines: safety, engineering, maintenance, inspection, well operations, subsea and IT systems.

A second study involved a client wishing to examine the viability of extending the operation of a gas terminal in Europe for an additional two years while a replacement was built. The focus for DNV was on equipment condition, maintenance, inspection, operations and safety practices.

The paper presented at Offshore Europe 2011 “Ageing Infrastructure Offshore – A Risk-Based Approach to Supporting Investment/Divestment” examines these case studies in detail and was co-authored by Sture Angelsen and Øyvind Amundsgård of DNV.

DNV press release