AMCouncil WA Chapter, RAM Seminar 2010 Author: Ernst Krauss CPEng, FIEAust Presented by: Guan Peh 1.

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Author: Ernst Krauss CPEng, FIEAust

Presented by: Guan Peh

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End of Asset Life…End of Asset Life…

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End of Asset Life…End of Asset Life…

Decision making is less important

We ‘let things deteriorate’ – we do not need them any longer

Resources and People needed elsewhere / can not afford to keep them on this Asset

We not always consider ‘Salvage value’ – what is the Asset worth to others

Focus on other Assets

Financial decline

Support need misunderstood

Diminished value

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End of Asset Life…End of Asset Life…

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Asset Management appliedAsset Management applied

Asset Life Extension Li

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Exte

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Pla

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Financial Decision makingFinancial Decision making COO / ROI / CBThese are the most commonly used

financial measures used in decision making: Cost of Ownership – extent of operating

cost including all support costs – budget Return on Investment measuring the

benefits gained from an investment Cost Benefit Analysis – the decision support

tool evaluating the incremental benefits from an investment decision

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Modelling principles revisitedModelling principles revisited

Step 1

Study Basis

Step 2

Model &

Results

1. Agree study outcome, which capability measures (i.e. availability) are studied

2. Agree scope and boundaries3. Gather PFSs and make RBD from it4. Collect failure data5. Describe operational flexibility6. Collect preventive maintenance

scheme

1. Make model2. Run model to obtain availability

measures3. Report results and explain

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Project modellingProject modelling

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Operations PhaseOperations Phase

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Identify and assessSteady State DefineProjects OperateAbandon DefineLife ExtensionIdentify and assessSteady State Steady State

Availability, Maintenance, Reliability monitoring, optimisation, project value

screening

Capability

confirmation

End of Life Strategy

Requirements and Targets

Delivery

Requirements and Targets

Optimised maintenanc

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Production optimisation

Short Term Business Plan / Maintenance Optimisation

Long Term Business Plan, Major improvements /upgrades

VerificationOptimisation

Delivery

Capability confirmation

Repair / Replace

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AVAILABILITY : choose the right AVAILABILITY : choose the right position on the curveposition on the curve

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Considering the project in its entirety generally reveals there is no point in improvement on some part of the system in isolation. In Termination phase, the same applies.

Best identify the “bad actors”, improve on those, and position the total system as desired.

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Case studyCase study This Decline Study enabled the optimisation of

future operational and maintenance strategies thus reducing the cost of maintenance, and hence OPEX.

Reduced levels of throughput create additional redundancy in the system allowing for the decommissioning of certain items, with time, where excess redundancy exists

The study determined how equipment use can be phased to match the reservoir decline prediction

It includes an economic assessment of proposed strategies to evaluate the resulting cost-benefit trade-off in terms of net present value (NPV)

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Case studyCase study

The approach used for this study:

Functional Block Diagrams to assist in the understanding of interactions of systems

Reliability model to understand the sources of production impact that exist in the current systems

Decline Model to model decline scenarios, what if options and worst case situations

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Case Study – Functional Block Case Study – Functional Block DiagramDiagram

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Case study – production Case study – production profileprofile

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The Production profile graph indication the current capability to meet production requirements. The blue line is a ‘regular’ operating period, where the red line shows the production during a major shutdown year .

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Case Study – Reliability Block Case Study – Reliability Block diagramdiagram

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Case study – capability Case study – capability matchedmatched

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Case Study – Production Case Study – Production capacitycapacity

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Case Study – Scenario Case Study – Scenario evaluationevaluation

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Gaps are larger in the

P50 situation,

other solution needed

Gaps are larger in the

P50 situation,

other solution needed

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Case Study – OPEX / Revenue Case Study – OPEX / Revenue evaluationevaluation

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P50 case (most likely) analysis:

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ConclusionsConclusions Reliability models are useful in estimating

opportunities to optimise the decline (or abandonment phase) in an Asset life cycle

Good data important, it contributes to high confidence in models

The accuracy of predictions are in direct proportion to the accuracy of model logic and input data

A structured approach and clear understanding of expectations and outcome focus is required (as for all models)

The value of modelling for the decline phase is valuable in optimisation of Production revenue in a constrained environment

It leads to improved understanding of issues and limitations that may exist in business acceptance or system capability

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Thank you for your interest…

Your Questions please

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