53UPSTREAM TECHNOLOGY 02 | 2014

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ASSET INTEGRITY

Upstream assets in the North Sea and other mature oil and gas provinces continue to defy the march of time thanks to a combination of life extension advancements and economic necessity. David Morgan reports.

Every year the world’s installed infrastructure of upstream assets gets a little older.

Incontrovertible truth of course, but try telling that to the operators of the many o�shore fixed and floating installations, onshore facilities and pipelines still in service way beyond their anticipated design life. The 50-year-old platform now looks likely to become commonplace and suggestions that some might even make 100 one day may not be that far-fetched after all.

The drivers behind this infrastructure’s extended economic life are many and various. Continuing high oil prices are clearly a prime factor, providing the imperative to keep installed infrastructure going and helping to make the case for incremental field developments once deemed marginal. Other factors include growing second or third-party use of such

facilities, the arrival of a new breed of operating company focused more on exploitation than exploration, and — whisper it quietly — an understandable urge to keep decommissioning liabilities and costs at bay as long as possible.

With the point on the graph at which upstream assets enter their so-called declining years pretty much a moving target, and many ageing assets now accommodating production profiles and fluid mixes for which they were not necessarily designed, improved asset integrity management is the order of the day.

One organisation quicker than some to grasp the business potential here was Lloyd’s Register (LR). With a flurry of high-profile acquisitions and initiatives that has accelerated sharply over the past five years, its energy division has pinned its colours firmly to the asset

integrity mast and now sees this as a key business di�erentiator going forward.

The process e�ectively began in the early 1990s with the acquisition of Marine O�shore Management (MOM), a move that more than doubled the LR oil and gas industry presence in Aberdeen overnight. Combined with the subsequent relocation of LR’s then o�shore division from London, this provided the critical mass for what would become its asset integrity business in the Granite City.

Other European and US acquisitions followed, among them Capstone and ODS (2005), ModuSpec, Celerity3 and Human Engineering (all 2008), Scandpower (2010), and West Engineering Services (2012). The latest deal, agreed in September 2013, saw further diversification away from strict compliance-type activities with LR taking an unspecified but “significant”

stake in energy services company Senergy and entering downhole and reservoir territory it had little or no involvement in before.

“All this has changed us very significantly as an organisation,” says Lloyd’s Register Energy senior vice president Tim Walsh, who heads up the group’s asset integrity o�ering globally. A naval architect who cut his teeth on shipbuilding, heavy engineering and fabrication work in his native north-west of England, he was closely involved with the MOM acquisition 20 years ago and has focused on integrity management ever since.

According to Walsh, the much wider range of organisations LR finds itself competing against these days bears witness to the maturing and strengthening of its capabilities in this area. “We now do a range of things in the asset integrity area that

Helping the aged

54 UPSTREAM TECHNOLOGY 02 | 2014

Lloyd’s Register has been around for a while — 253 years to be precise — and prides itself on the experience and calibre of its sta� and their

ability to work to the highest technical standards.

Tim Walsh, the energy division’s senior vice president asset integrity services, believes the new companies and capabilities added to the group in recent years have been a good fit both strategically and culturally.

And people, he points out, are just as important to the ageing asset integrity management process as the engineering and technical aspects of life extension. Oil & Gas UK shed timely light on this management issue in 2012 with

the publication of guidelines for the management of ageing assets and life extension in the North Sea.

“That report actually sets out a very solid framework around the whole management piece, starting with this point of actually linking the management of asset integrity to the business plan,” says Walsh.

“Where is the connection that says: ‘Well actually we now want this particular installation to run for another 20 years’, and how does that translate through to the decisions to be made about maintenance, integrity, investment, what needs to be modified or replaced, what needs to be done di�erently in terms of looking after things.

“This permeates all the way through

the profile of competency, so how do we ensure that people actually have the competencies to recognise ageing and life extension issues?

“How do we deal with the bit of this that cannot be repaired or replaced — the people? Not only have we had installations that have been out there 20 or 30 years, but amazingly many of these installations also have a significant number of people on them who have been there from the beginning.

“So knowledge transfer is also an issue,” concludes Walsh. “How do we capture the knowledge the o�shore installation manager, the o�shore inspection engineer and the maintenance crews have acquired over all those years?”

Harnessing people power

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ASSET INTEGRITY

our traditional rivals in the core classification, verification and certification sector are not particularly near, and it’s the same in the drilling integrity, consulting and manufacturing inspection lines,” he says.

Global issueThe energy part of LR’s business now boasts over 3000 personnel worldwide, supported by

technology centres in Singapore and the UK specialising in engineering and marine activities, respectively, and a growing involvement in joint industry projects. Walsh is headquartered at the group’s Union Terrace complex in Aberdeen, which today has a professional sta� headcount of around 300, with an estimated 75% to 80% of them dedicated

for the most part to supporting ageing assets in the North Sea.

“But asset integrity is absolutely not just a UK continental shelf issue — it’s everywhere that we are,” Walsh declares. LR has other teams working along similar lines on installed asset bases around the world, he says, adding that in his ageing platforms oversight role one week alone recently

had taken him to the United Arab Emirates, Norway, and Spain. The following week was no di�erent, with the Gulf of Mexico and Malaysia among his destinations.

The client mix is also very di�erent these days, with Walsh noting that with oil prices now 10 times higher, one North Sea operator’s entire production from the province is now significantly

less than the output from one good asset 15 or 20 years ago.

“Operators have di�erent approaches to how they manage things and dealing with today’s range of di�erent business models and operating philosophies is one of the challenges for us,” he says.

“Some are very comfortable with outsourcing or subcontracting a lot of this activity. Some who previously did that are now taking more of this activity in house, save for specialist support and advice in certain areas. And some of the newer entrants to the market are determined right from the

the profile of competency, so how do we ensure that people actually have the competencies to recognise ageing and life extension issues?

“How do we deal with the bit of this that cannot be repaired or replaced — the people? Not only have we had installations that have been out there 20 or 30 years, but amazingly many of these installations also have a significant number of people on them who have been there from the beginning.

“So knowledge transfer is also an issue,” concludes Walsh. “How do we capture the knowledge the o�shore installation manager, the o�shore inspection engineer and the maintenance crews have acquired over all those years?”

had taken him to the United Arab Emirates, Norway, and Spain. The following week was no di�erent, with the Gulf of Mexico and Malaysia among his destinations.

The client mix is also very di�erent these days, with Walsh noting that with oil prices now 10 times higher, one North Sea operator’s entire production from the province is now significantly

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ASSET INTEGRITY

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less than the output from one good asset 15 or 20 years ago.

“Operators have di�erent approaches to how they manage things and dealing with today’s range of di�erent business models and operating philosophies is one of the challenges for us,” he says.

“Some are very comfortable with outsourcing or subcontracting a lot of this activity. Some who previously did that are now taking more of this activity in house, save for specialist support and advice in certain areas. And some of the newer entrants to the market are determined right from the

start to have that capability within their organisation. Quite frankly there is no right answer to this — all are perfectly acceptable providing the responsibility is clearly defined and providing operators and duty holders understand that while you can outsource execution, you cannot outsource responsibility for ensuring there is su�cient oversight in place.”

Structural fatigue is clearly the major challenge where ageing installations are concerned. While a pump, generator or piece of electrical equipment can be changed out, or corroded topsides pipework can be treated if there is still su�cient base

material to permit coating or replaced if need be, fatigue rarely allows such luxury. “Particularly when it comes to floating and jacket structures, you can’t treat fatigue and turn the clock back to zero,” says Walsh.

“We are now seeing assets that are being e�ectively reassessed for what will be a 50-year operating life and there is talk of some duty holders and operators in the Norwegian sector potentially seeing assets that may have a 100-year lifespan,” notes Walsh. “So we are being tasked increasingly with supporting clients by looking at things like fatigue lives, understanding what condition the asset is in and

determining what refurbishment programmes need to be put in place in order to hit particular target dates.”

Although the structure’s original design life is known, establishing “current condition” is not always a simple matter. Most ageing installations will have had several owners and perhaps also several di�erent engineering and maintenance contractors responsible for them at one time or another. At each of those transitions there is potential for loss of knowledge and paperwork. “So when are we talking about?” wonders Walsh rhetorically. “That is probably the hardest issue to deal with —

56 UPSTREAM TECHNOLOGY 02 | 2014

“You can’t treat fatigue and turn the clock back to zero.”

Tim Walsh,Lloyd’s Register

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how far out are we looking at the operation?”

With beds on oshore installations at a premium, issues around skills and availability have conspired to make platform fabric maintenance a tricky issue in the North Sea and elsewhere. “Let’s be honest, on occasion over the course of their lives some structures will have had more loving attention than others,” he observes.

“The most basic forms of maintenance, like coatings and painting, tend to suer most simply because they are very labour intensive. Squads of 10, 20 or 30 people may be required for this work, and on a platform with total bed space of 70 or 80 that can be very di�cult.”

Improving asset integrity management is not just about maintaining things, he adds. It is also about making adjustments in light of infrastructure role changes — for example when a

once prolific production platform now simply provides access for third party operations — as well as understanding the weight implications when equipment is added or taken o.

Obsolete topsides kit can pose a potential risk if left in place, and it is not uncommon to find items of equipment being dutifully inspected and maintained long after they have fallen into disuse.

“It’s a case of making sure the integrity and the operating and maintenance strategies reflect the infrastructure’s current and likely future use, and are not just based on ‘Let’s do this because we’ve always done it’,” explains Walsh. “We sometimes see that attitude with rating of equipment, where vessels and pipework originally installed have operating pressures that are way above anything that they’ll see now. “

With the reduced production

profiles of many of today’s marginal field developments relying heavily on installed infrastructure, maintenance has become a hugely strategic issue. “But how do we control and manage that process, and how do we ensure that it is done safely? For all the duty holders, and absolutely for us, the bottom line at the end of the day is about safe operation for everybody, without exception.”

Walsh says LR is relishing the challenge of bringing “intelligent decisions” to bear on the integrity management of ageing pipelines, platforms and other oil and gas facilities. “You can’t justify putting significant new infrastructure in on the basis of future production profiles, so keeping things going is crucial,” he adds. “You really wouldn’t want to have to reinstall a major piece of pipeline infrastructure like Forties!”