Intelligent asset management to drive more efficient operations

By Eric Luyer, IBM, and Bill Ely, Global Industry Executive Oil & Gas Industry, IBM Maximo Asset Management

Overview

As Oil and Gas companies continue to meet the demand growth in worldwide consumption, they focus on ways to increase supply. They continue to seek more cost-effective exploration and production while maintaining high health, safety and environmental standards. At the same time, the Oil and Gas industry faces other key challenges and uncertainties such as: price instability in major producing countries, an aging workforce, aging infrastructure and regulatory requirements.

The Oil and Gas industry has made steady progress in improving operations through better data capture, visualization, analysis, and automation. Yet, many improvement opportunities exist in real-time production surveillance, drilling and completion optimization, supply-chain and materials management and oil field equipment reliability and maintenance.

When we talk about operational excellence we are talking about how we can continuously improve our level of service at lower costs. This includes both our physical assets and equipment, human capital and how we use the data and information we have available to make better operational decisions. To do this, we need better operational intelligence – which is a function of data and information quality, delivered across the right timescale.

Delivering quality operational information at the wrong time or across the wrong timescale will not improve decision making. Without quality data, one does not have quality information or operational intelligence. Therefore, it is reasonable to conclude that if one wants to achieve operational excellence, one needs quality data, transformed into information based on the operating context (operating history, engineering and maintenance experience, market conditions, regulatory context, etc..) and delivering that information at the right time, across the right timescale – from real time operational decisions to longer term capital asset acquisition or divestiture decisions.

Basically, operational excellence is about information enabling event-driven decisions – tactical and long term, across multiple domains and process workflows from geo-science, drilling, production, transportation and refining operations.

Today, supporting systems are scattered with hundreds of applications, many that are custom developed, having propagated redundant and inconsistent data stores and silos across engineering, geo-science and operational domains making it extremely difficult to access and effectively use data or information.

Most Oil and Gas professionals spend more than half of their time searching for, assembling and formatting data instead of analyzing in order to make better operational decisions. An opportunity exists to combine the industry's best monitoring and instrumentation capabilities with data mining and predictive analytics – providing real-time operational intelligence resulting in improved decision making.

Enabling operational excellence and improving our operational intelligence, three key priorities will impact the industry's ability to drive more efficient operations.

These include: standardization, convergence and collaboration. These key priorities are also core design and architecture principles incorporated into IBM's leading solution for Asset Management for this industry: Maximo for Oil and Gas.

Standardization

Chemical & Petroleum engineers and geo-scientists know the benefits of standardization – such as, repetitive solutions lead to improved optimization, inter-changeability and interoperability, a basis for benchmarking, quality assessment and process improvement.

The Chemical and Petroleum application portfolio is scattered with hundreds of applications resulting in many redundant, inconsistent and generally poor quality data silos.

Reviewing the evolution of an application portfolio gives one insight into how we got to where we are today, and illustrates today's trend towards open, standards based architectures. Regarding this evolution, there have been three models of application portfolios: traditional (custom development), ERP centric, and Service Oriented Architectures (SOA).

The evolution of most oil & gas portfolios has traversed from "Traditional" (or custom developed software) through "ERP Centric" to "SOA" or open architectures. Even ERP vendors have acknowledged that their goals of a single system will never be achieved, as evidenced by numerous architectures which represent ERP strategies to open up their systems to communicate with the ecosystem of other applications required by the industry to run their business.

Basically, every industry has gone through this progression in one form or another and some industries have adopted the open model faster than others – much of this depends on the risk and opportunity characteristics of the industry, their shareholders and overall company leadership.

Standardization is the key enabler for resolving most of the challenges resulting from the evolution of application portfolios. However, many times the challenge is choosing one.

There are many standards – technical, industry, operational, application, or best practices.

The direction and core design principles that govern the development of IBM's Maximo Asset Management for Oil & Gas industry solution includes components of each of these standardization areas.

Figure 2: Standardization and simplification provides tremendous benefits, as long as you do not sacrifice functionality.

The IBM Maximo Asset Management solution for Oil & Gas continues to lead EAM vendors with more mature, scalable technology architecture. IBM Maximo Asset Management is a JAVA certified enterprise application, completely built on a J2EE, standards based open architecture. This standardization provides IBM Maximo Asset Management customers with many benefits, primarily around enterprise scalability and lower cost of ownership.

The IBM Maximo Asset Management industry solution for the Oil & Gas industry supports many industry standards and will continue to do so into the future. As the market trend for adopting industry standards continues to increase, vendors and suppliers will be able to provide more value through data exchange and transformation services built on the standards.

Examples to mention here are: ISA 88, ISA 95, ISO 14224, ISO 15926, MIMOSA, OPC - OLE, Open O&M, PAS 55, PRODML and WITSML.

The IBM Maximo Asset Management industry solution for Oil and Gas provides industry specific extensions to meet growing asset and service management challenges. For example: the solution includes many industry-specific applications supporting best-practices, including: Work and Asset Management, Calibration, Failure Reporting, Incident and Change Management, Regulatory Compliance, Investigations, GIS Spatial Integration as well as integration with IBM's Integrated Information Framework (C&P IF) at ibm.com/software/industry/chemicals_petroleum/, etc... 

Convergence

Managing oil and gas assets has become more complex. Convergence may be something not currently on your radar. If not, then it needs to be. The wake-up call in the Oil and Gas industry has come with the data explosion from advanced field instruments connecting in real time, communicating over secure networks to anywhere in the world – where the expertise resides – into operational optimization and enterprise applications. Consider the current application portfolios we currently support (redundant data silos) now being caught up on this data explosion.

Convergence offers tremendous opportunity to improve operations – business model transformation, shifting of assets and risk – But...it also introduces significant and new risks if they are not properly managed.

The biggest challenge is cultural – as more and more assets become more intelligent, instrumented and interconnected, the lines between operational and infrastructure IT become more and more blurred.

Does Operations have the IT skills to enable and support this capability? Does IT have the operational background and experience to enable and support this capability? This is a major issue – without the right kind of operational experience, introducing IT resources into these operational environments can pose significant safety, reliability and other operational risks.

Figure 3: The combination of instrumented, interconnected and Intelligence is an opportunity for companies in the Oil & Gas industry to think and act in new ways.

The IBM Maximo Asset Management industry solution for Oil and Gas in combination with IBM Maximo Asset Management for IT can help as it can manage your complete IT infrastructure – including all IT assets, hardware, software and telecommunications infrastructure, required to deliver these new services – from the drill bit or cracking unit to enterprise applications inside and outside of the firewall. Having the capability to manage all assets in a single, scalable solution optimizes the capability to manage these new services.

Collaboration

Depending on the maturity of your organization regarding asset management, you will get a different answer to this question. Not all asset management implementations or solutions support collaboration in the same way. Many implementations of an asset management strategy don't include input across operations, engineering and maintenance domains.

In regards to collaboration, those oil and gas organizations having more mature asset management practices around operational excellence have been found to have highly collaborative processes and cross-functional work teams in place. To drive more efficiency around operations, a key priority is enabling these groups to work collectively. Those Oil and Gas companies having less mature asset management practices typically have their own 'version of the truth", different information silos, much of it redundant, and of course, there isn't much consistency across them (!)

Related to the standardization priority we discussed previously, getting these groups to work together also means getting them to work from a common process perspective (or at least where their processes overlap), the same system, fewer systems or having their existing systems improve how they communicate and orchestrate a business process. To do that efficiently, these systems must be built on open architectures and communicating through industry standards.

Figure 4: Who is responsible for delivering Operational Excellence?

IBM's Maximo asset Management industry solution for the Oil and Gas industry is taking the lead in creating cross functional applications that are typically outside the traditional maintenance domain. Examples include: Management of Change, Incident Management, Compliance, Defect Elimination, FRACAS (Failure Reporting and Corrective Action Systems), and Control of Work capabilities.

The core design principles for these applications include assets / equipment, work, locations, safety and hazards – all of which are core architecture objects for an asset management solution. So you don't have to have separate systems anymore, each with redundant asset hierarchies and equipment lists, materials, work procedures, priorities, safety plans... all these can be consolidated into a single platform, providing a great way to share information and collaborate across traditional silos.

The real driver here for more efficient operations is getting these traditionally disparate teams working together. That isn't easy to do when these groups use different systems – each group feeling their system is the "master record".

A collaborative environment can help the Oil & Gas industry address the "great crew change" or aging workforce issue. This priority is a great way to capture some of the knowledge and experience before it walks out the door in the next 5 to 10 years.

In conclusion, the opportunity exists to improve our operational intelligence. The solution provided today includes better utilization of our industry's best monitoring and instrumentation capabilities with data mining and predictive analytics – providing real-time operational intelligence that are able to integrate, model and analyze data across different domains, process areas and timescales resulting in improved decision making.

Priorities around standardization, convergence and collaboration help drive the industry to make step changes in safety, reliability and more efficient operations.

These are the dominate success factors that those in the top quartile of our industry are incorporating into their asset management strategies now and into the next several years. IBM's Maximo Asset Management industry solution for Oil and Gas is the market leading enterprise platform for enabling operational excellence in this industry.