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Prevent-Down-time-Oil-and-Gas

Reduce The Cost of Downtime in the Oil & Gas Industry

Written by Bill McDonald on May 29, 2018

Every moment of refinery equipment downtime is like throwing dollars into the Atlantic ocean. Having equipment down is expensive for the oil and gas industry, but it’s usually treated as an unavoidable cost of doing business.

That’s not as true as it used to be. New mobile safety solutions allow oil and gas companies to address equipment issues before they reach critical levels, reducing downtime significantly.

 

The Downsides of Down Time

When oil and gas equipment goes down, a valuable part of the business screeches to a halt. An oil rig sits motionless. Machine parts have to be ordered, which takes days or weeks. The workflow is interrupted and deadlines are missed.

One study found that between 2009 and 2012, there were 1,700 refinery shutdowns - an average of 1.6 per day. That can mean a reduction of more than 150,000 barrels per day, which is a major blow to both the individual refinery and nationwide oil availability.

Having downtime also creates staffing issues. Oil and gas workers who are put out of work by down equipment will only sit idly by for a limited amount of time. Their skills are easily transferable to other operations, which may be tempting during your downtime.

 

Monitoring and Maintenance

Downtime is most costly when it’s unexpected - and 92% of shutdowns are unplanned. These sudden shutdowns cost oil and gas companies an average of $42 million a year and up to $88 million a year in the worst case scenarios. These stunning numbers beg the question: Why is so much downtime unplanned?

Observational studies have shown that unplanned shutdowns are often attributable to things like worn equipment, broken machines, rusty tanks, and other evidence of wear and tear. Or, to put it another way, down time is often unplanned, but not unpredictable. With careful monitoring, it could have been prevented.

For example, all hoses used in oil and gas byproduct transportation have an estimated maximum lifespan from the manufacturer. Facilities routinely exceed these life expectancies, intentionally or unintentionally. It’s simply hard to tell when a hose is worn until it fails - causing downtime.

Now imagine that a facility has a routine maintenance schedule that tracks hose life and recommends replacing hoses before they reach their life limits. There’s no more guesswork. Simply through routine action, this company is preventing costly shutdowns due to blown hoses.

 

Tech Tools and a Data-Driven Approach

Of course, it’s tricky to track the lifespan and wear of every item in an oil or gas operation, from the tiniest bolt to the biggest rig. That’s where software comes in.

Using monitoring software, a safety supervisor can establish thresholds and benchmarks for every item in the operation. When a piece of equipment is reaching end-of-life, an alert is triggered and staff can react.

Many operations pair software with complex formulas and indexes that help predict disasters before they happen. For example, an MTBF index shows the mean time between failures - an estimate of how long equipment and vehicles can go before a failure starts to become inevitable.

Worn and hazardous equipment can also be reported right on-site by workers using a safety app. With a tech solution like Firsthand, oil and gas workers can upload notes, attach photos, and launch a process that addresses maintenance issues immediately and prevents downtime.

And when downtime goes down, profitability goes up - way up. A study by GE found that data-driven oil and gas maintenance schedules resulted in 36% less unplanned downtime and an average $17 million improvement in the bottom line.

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