India’s Offshore Integrity - Learn and Use Global Offshore Experience

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Do we have an established asset integrity assurance system to handle the mixed bag of State-owned enterprises and Private Ventures?

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India’s Offshore Integrity - Learn and Use Global Offshore Experience

  1. 1. Features Corrosion Management India’s Offshore Integrity Learn and Use Global Offshore Experience M Valiappan Since the piper Alpha disaster in 1988, many changes have been implemented across world offshore regions. Corrosion related failures of processing facilities are a major source of risk to offshore oil and gas installations. It has been recognized that there are many ways to organize and operate successful corrosion management systems, each of which is asset specific depending on factors such as Design, Stage in Life Cycle, Process Conditions and Operational History. Our country is yet to develop programs like Joint Industry Projects (JIPs) to address the materials and corrosion concerns with specific reference to our Indian operating conditions. P iper Alpha was a North Sea accounted for around 10 percent of the the HSE may draw on the expertise of oil production platform. This oil and gas production from the North the nuclear industry (Source: The Public platform began production in Sea (Source: http://en.wikipedia.org/ Inquiry into the Piper Alpha Disaster, 1976, first as an oil platform and then wiki/Piper_Alpha). Cullen, The Honorable Lord, HM later converted to gas production. An Safety is not just a personal or Stationery Office, 1990). explosion and resulting fire destroyed company or industry matter, but it it on July 6, 1988, killing 167 men, is a national and international issue. Key Programme 3 with only 59 survivors. The death toll Lord Cullen, commissioned by the In 2004 Health and Safety Executive’s included 2 crewmen of a rescue vessel. Department of Energy, UK to investigate (HSE, UK) Offshore Division started Key Total insured loss was about £1.7 billion the accident, recommends that hazards Programme 3 (KP3). This was a resource- (USD 3.4 billion). To date it is the world’s should be assessed from the earliest intensive initiative involving nearly 100 worst offshore oil disaster in terms both stages of design in the same way the co-ordinated, targeted inspections over of lives lost and impact to industry. At nuclear industry does. The new safety three years. The report was published in the time of the disaster the platform directorate for offshore installation in November 2007 (Source: A report by the Offshore World | 35 | FEBRUARY - MARCH 2010
  2. 2. Features Offshore Division of HSE’s Hazardous normally unattended installations; http://www.indiainbusiness.nic.in/ Installations Directorate, 2007). To mark floating production installations; industry-infrastructure/industrial- the 20th Anniversary of the Piper Alpha floating production storage and sectors/oil-gas.htm). Policies like NELP disaster at a parliamentary debate on offloading vessels and mobile drilling and CBM have been instrumental in July 2nd 2008, Secretary of State for rigs. It involved all of OSD’s Specialist showcasing India’s potential in the Work and Pensions commissioned and Inspection Management Team oil and gas sector to the world. As HSE to review the progress made by inspectors and all levels of management. part of the NELP program, firms are the UK offshore oil and gas industry The inspection program was structured encouraged, via incentives, to explore in addressing the issues identified using a template containing 17 elements in deep sea beds. Upto 100 percent by the KP3 work. Overall, the review covering all aspects of maintenance Foreign Direct Investment (FDI) has found that the industry had allocated management, and a number of Safety been allowed in exploration (including considerable resource and effort to Critical Element (SCE) systems tests. offshore), refining (private sector only) improve offshore assets and compliance Corporate and cross-industry and retailing of petroleum products. with relevant standards, and that learning and communication is one of Gradually, the Indian oil sector is the offshore industry leadership has the 17 elements. There was evidence that moving from a subsidy and price responded well. There was evidence of the culture in the industry is changing, controlled environment to a free market good progress in addressing the issues with more open sharing taking place and along the way paving the way identified by the KP3 work. However, between organizations. However, the for initiatives in offshore drilling and the review also found that the work is by review considered that more effort is logistics. Considering the fact of efforts no means complete and continued effort required by the industry to break down required to break down the barriers for is necessary to sustain the momentum of barriers which are preventing more corporate and cross-industry learning improvement initiatives, so that facilities effective integration of the work of and communication process identified in are not allowed to degrade to the extent their independent verification bodies, KP3, we have many concerns on safety identified in the 2007 KP3 report (Key and also noted that concerns still exist aspects of our production systems. Programme 3 - Asset Integrity - a review over effective auditing and knowledge of industry’s progress, a report by the sharing within companies. Do we have an established asset Offshore Division of HSE’s Hazardous The KP3 report stated that there integrity assurance system to Installations Directorate, July 2009). were wide variations, not only between handle the mixed bag of State- dutyholders but also individual assets owned enterprises and Private Oil and Gas Production in India managed by the same dutyholder. Ventures? According to Oil and Gas Journal (OGJ), This situation could be improved by Oil and Natural Gas Commission India had 5.6 billion barrels of proven oil dutyholders and assets sharing best (ONGC) is a major offshore public reserves as of January 2009, the second- practice and by individual companies sector Indian company. ONGC holds largest amount in the Asia-Pacific region improving their monitoring and 79 percent in offshore crude oil and the after China. India’s crude oil reserves auditing functions. remaining production is carried out tend to be light and sweet, with specific by private players. Reliance Industries gravity varying from 38° API in the Our Indian Scenario Ltd,(RIL) is becoming a significant offshore Mumbai High field to 32° API Consequential to liberalization in operator in the oil sector and is the at other onshore basins (Source: http:// petroleum sector, Government of largest private oil and gas company in www.eia.doe.gov/emeu/cabs/India/ India is encouraging participation of India. Other important private sector Oil.html). foreign and Indian companies in the players include Cairn India, a branch exploration and development activities of UK based Cairn Energy and BG KP3 – Our Way Forward to supplement the efforts of national oil Exploration. The KP3 Program involved targeted companies to narrow the gap between Since the Piper Alpha disaster inspections of nearly 100 offshore supply and demand. A number of in 1988, many changes have been installations representing about contracts have been awarded to both implemented across world offshore 40 percent of the total on the UK foreign and Indian companies for regions. The emanating points for these Continental Shelf. These included: exploration and development of fields sweeping changes have been the Cullen fixed installations; attended and on production sharing basis (Source: Report and the UK North Sea industry. Offshore World | 36 | FEBRUARY - MARCH 2010
  3. 3. Features and production type to a major improvement in the operation – primary, secondary or of offshore topside process facilities. tertiary; and the most dangerous threats are Corrosion Management or Moni- Sweet (CO2) corrosion, toring – Is it an interchangeable H2S (sour corrosion and terminology? cracking), Bottom of Line Our state-owned enterprises and (BOL) and Top of Line private companies are yet to focus on (TOL) corrosion and MIC. developing comprehensive corrosion Corrosion has been management. The Oil Industry Safety shown to be the cause of Directorate (OISD) is an organisation 15-20 percent of leakages supported by all petroleum companies of hydrocarbons from of India, like IOCL, ONGC, BPCL, offshore plant (Source: HPCL, OIL etc. OISD has basically Patel R and Rudlin J: framed rules and guidelines for Safe ‘Analysis of erosion/ Distances to be observed for various corrosion incidents in Facilities in an oil installation. OISD has offshore process plant and issued approx 110 Standards relating However, there are many secondary, the implications for NDT’. to Installation, Commissioning and finer points that constitute important Insight 2000 42 (1) 17-21). Leakages can Operation of Oil Facilities related to lessons learnt, many of which still lead to more disastrous consequences Oil Industry in India (Source: http:// need to be addressed, if pragmatic life if subsequent ignition was to result in www.oisd.nic.in). OISD has published a cycle safety and performance are to be fire or explosion. In order to reduce the standard, OISD-STD-188 for Corrosion recognized. It is argued that the second number of leakages from this source, Monitoring of Offshore and Onshore tier modes of failure, such as internal the defects that lead to failure need Pipelines 2000. corrosion, environmental cracking, to be detected and mitigating action Considering the blend of various erosion, etc., have been somewhat taken before failure occurs. Practical ownership on assets, operation and overlooked (Source: Offshore Integrity experience from the North Sea has shown maintenance available in India, we need Management 20 Years ON - Overview that the development of comprehensive to have an Open Source Document like of Lessons Learnt Post PIPER ALPHA, corrosion management systems, coupled the one, Corrosion Risk Assessment OTC 20051-PP, 2009). Corrosion related with a commitment by the operator, and Safety Management for Offshore failures of processing facilities are a maintenance contractor and specialists’ Processing Facilities published by major source of risk to offshore oil & sub-contractors / consultants, can lead Health and Safety Executive1999/064 gas installations. Corrosion can be a life-limiting cause of deterioration by general wastage, and/or pitting and/ or environmentally assisted cracking to plant items which in turn can lead to loss of containment of hydrocarbon fluids and other process fluids. There are many forms of corrosion such as, uniform corrosion, pitting, crevice, erosion including impingement / cavitation, galvanic, selective leaching, intergranular, fretting/wear, stress corrosion cracking. For offshore and subsea conditions the critical mechanisms are a function of reservoir composition, the operating conditions Offshore World | 37 | FEBRUARY - MARCH 2010
  4. 4. Features Institutions. much required to achieve a common Our country is yet to goal of establishing a ‘Safe and Reliable’ develop programs like Joint environment. Demands arise in various Industry Projects (JIPs) to components of corrosion analysis need address the materials and to be properly Designed, Applied and corrosion concerns with Assessed for the Levels Monitored specific reference to our through a proper Communication Indian operating conditions. path. Experience gathered from outside sources could be taken as valuable guidelines to enumerate the importance of such studies and initiate JIPs. A school of thought continues to live with our to capture ‘best practice’ from industry Indian industries that on corrosion management for offshore Research community, especially the processing facilities. government owned scientific and industrial research laboratories, do Collaborative Efforts – A Sign of not effectively utilize the research and Success for Joint Responsibilities technical capabilities to deal with the to ensure Integrity of Assets real world conditions. It has been recognized that there are many ways to organize and operate What do we really need? successful corrosion management A six step functional analysis floated systems, each of which is asset specific by Corrosion Management Services depending on factors such as Design, (CMS) can be used effectively to capture Stage in Life Cycle, Process Conditions corrosive situations and find “Optimal” and Operational History. All the integrated solutions. standards and regulations put forward Our analysis starts with Prediction by various agencies across the world of future scenario. Collection of are the outcome of joint efforts of experience from various sources is Government-Asset Owners-Technology the main driver for a valid Prediction Providers-Safety Agencies-Inspection Assessment of Design-Apply-Monitor- Authorities-Academia-Research Control processes is very crucial in the whole functional analysis to verify and provide inputs for strengthening Predict process. Considering the nature of operation experienced in the offshore production and M Valiappan is Corrosion ‘Uncertainties’ exist to predict Management Consultant the future ‘Reservoir Fluid with Corrosion Management Composition’ with changes Services (CMS), Coimbatore. in the levels of corrosive CMS is a self-employed specialist setup for technology constituents and efforts advisory services and software required to ensure asset solutions. integrity process, Triangular Email: corrosion.management@ System Development is very gmail.com Offshore World | 38 | FEBRUARY - MARCH 2010

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