Operational Resilience in FLNG
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A flexible, adaptive business continuity planning framework for FLNG
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Operational Resilience in FLNG
- 1. Value without compromise. A Framework for Business Continuity to Provide High Availability in Floating LNG Operations Pete Winn and Alex Lal Velrada
- 2. How does business continuity planning help achieve a resilient operation? What changes with FLNG? Why should we care? What should we do? Today’s agenda
- 3. Established in 2009, Velrada is an award winning, Australian-owned, business and technology consulting firm with strong experience in resources around the Asia-Pacific region. Pete and Alex have delivered Business Continuity Planning engagements for a range of clients in the Oil & Gas, Mining, Engineering and Construction industries, and the Public Sector. Our consulting in this area draws on strong capabilities in: Operational Efficiency Integrated and Intelligent Operations Risk Management Organisational Change Management Analytics and Optimisation of Processes Supply chain and logistics optimisation Online Collaboration and Information Management Pete Winn Intelligent Operations SME Alex Lal Business Continuity & Disaster Recovery SME By way of introduction
- 4. RISK MANAGEMENT Emergency Management (EM) Business Continuity Management (BCM) Health & Safety (HSEC) Disaster Recovery (DR) A heavy focus and highly mature function engrained in the culture of the organisation A mature practice throughout Oil and Gas backed up by solid historical evidence Well developed and delivered supported by legislation and license to operate Often overlooked and draws together a number of functions throughout the businessProvision of highly available systems and technology mature in O&G The role of business continuity in supporting resilient operation
- 5. 63% of a business functions have a recovery time of less than 24hrs. (Gartner: Ten Best Practices for Creating & Maintaining Effective Business Continuity Management Plans) 47% of organisations do not know the cost of business disruptions in the last 12 months. (KPMG: global Business Continuity Management Program Benchmark Study) Organisations do not have an up-to-date business continuity or disaster recovery plan (Gartner: Ten Best Practices for Creating & Maintaining Effective Business Continuity Management Plans) 1 3in 2weeksMore than half of organisations believe their ‘worst case scenario’ outage to be 2 weeks or more. (Gartner: Ten Best Practices for Creating & Maintaining Effective Business Continuity Management Plans) Expectations vs. Reality
- 6. This is a new technology with a high degree of variability and a limited knowledge base to support efficient operations. With this in mind, can you still rely on identifying all the risks up front? FLNG changes the game Challenging cost Environment Leading to requirement for constant offloading in all conditions New technologies that aren’t understood in new environments Multiple concepts will be realised leading to a high variance in operating vessels Lack of support from nearby onshore facilities & supply base
- 7. ScenariosMitigation PlansRisks Scenarios Scenarios Scenarios Scenarios Scenarios What does this mean? ScenariosMitigation PlansRisks ScenariosMitigation PlansRisks Recovery Strategies Planning Framework
- 8. Level of Preparedness ‘MITIGATE’ Possible Recovery Points Effectiveness of Planning ‘REMEDIATE’ TIME IMPACT Improvement Normal Deterioration Getting it right INCIDENT
- 9. A business continuity planning framework shifts the focus from reacting to specific known scenarios, to planning based on what’s important to the operation: reducing recovery time.
- 10. Assess ”Understand the scope of the operation and prioritise based on value chain analysis and maximum acceptable outage” Emergency Response Medical Business and Facilities Functions OffloadStorageProcessingExtraction Reliability & Inspection Control & Operations Supply & Logistics Marine Operations Production Planning Surveillance Health and Safety Contracting Reservoir Optimisation Remote Assistance Maintenance Planning
- 11. Govern “Embed the framework define responsibilities, assign ownerships and embed in your continuous improvement process” Assess ”Understand the scope of the operation and prioritise based on value chain analysis and maximum acceptable outage” Test ”Check that the appropriate strategies are in place and understood throughout the organisation” Analyse ”For each function map out the critical human, information, physical, system and process assets and their interdependencies” Plan ”Identify and record recovery strategies for a failure in each asset competent of the business function
- 12. CMS Outage Another operator has suffered a helicopter incident causing the grounding of a significant proportion of your fleet for safety concerns, this has lead to a lack of coverage for medical evacuation and a shut down of operations. Helicopter Vendor Helicopter Contract Medical Evacuation Contract Manager Helicopter Fleet Fleet Share Agreement Contract Analyst No backup process! CMSPaper Copies Detailed Process Instructions Shared Medivac Manager ill! No backup fleet! Single Vendor! Fleet grounded!
- 13. Little evidence of major incident planning. Processes are unclear or poorly documented. Little or no understanding of which business processes or systems to prioritise in the event of a major incident. Very Immature Processes are defined and documented with some gaps, but are largely manual. Information used to prioritise business processes or systems in the event of a major incident is incomplete or not used Immature Processes are well defined but inconsistently applied. Monitoring tools in place but not used proactively. Core business processes and systems can generally be recovered within an acceptable timeframe. Somewhat Mature Mostly resilient with some degree of process automation. System and infrastructure monitoring tools in place and proactively used to anticipate/respond to BCDR incidents. Mature Highly resilient with a degree of process automation. Monitoring tools in place and proactively used for future planning. Near-line BCDR capability that is well-aligned to business operations Advanced Realistic. Achievable. Build confidence early. Iterate. Buy in.
- 14. FLNG poses unique BC challenges. The risks are substantial and have changed and so should the planning in response to this. Planning and preparation is key to reducing the time to return to operations. Framework approach leads to a quicker return to normal operations. Key takeaways
- 15. © 2014 Velrada Capital Pty Ltd. All rights reserved. The information contained herein is for informational purposes only and represents the current view of Velrada Capital as at the date of the presentation. Velrada Capital cannot guarantee the accuracy of any information provided after the date of this presentation. Velrada Capital makes no warranties, express, implied or statutory as to the information in this presentation. Thank you. www.velrada.com 1300 835 723 info@velrada.com @velrada linkedin.com/company/velrada Australia. New Zealand. Singapore.
Editor's Notes
- Message = mismatch between expectations to recover and ability to recover Threats are difficult to anticipate and may occur without warning Tend to escalate quickly and impact operations in ways that are unpredictable and difficult to contain BC planning in the Oil & Gas industry is typically not very mature Lack of or poor planning can cause severe reputational damage and threaten safety It directly impacts the bottom line
- Changing the game around operations -> leads to change of approach. NOTES Flex – LNG trains offshore… send through examples. Take away is new technology, not everything that Shell does will be applicable to all FLNG vessels Scenarios vs. robustness Likely to operate in more remote and challenging environments May be exploiting more complex and marginal reservoirs May be static or mobile
- Limited value in attempting to plan for every possible business continuity scenario, where you don’t have the historical data to drive those scenarios Instead a focus on a robust framework for business continuity, identifying critical capabilities and assets to allow operations to continue (or be shut down safely) (first animation) This will allow you to react to a wider range of events without having to identify every possibility up front. (second animation) Scenarios can then still be taken to test the plan
- Preparation is key to containing the impact of a major incident. Planning is the critical factor in recovering normal operations as quickly as possible.
- It will help you identify the most common causes, patterns and impacts of major incidents. Prioritise those that occur most frequently and have the greatest impact on your BAU operations. be realistic; by describing a sensible business continuity baseline and how to enact it. be achievable; it must be achievable and actionable within the organisation’s financial, operational and resource constraints. provide confidence; by describing in detail the structures, systems and processes that will be invoked in the event of a major incident. be proportionate; by ensuring planning and preparation activities can be accommodated within normal business operations, without creating an unmanageable additional workload. be structured and repeatable; by removing dependencies on particular individuals or specialist skills. have business acceptance; it must be acceptable to all relevant stakeholders.