Mike Marshall, PE (mtmarshall.llc@gmail.com) is an Oil & Gas industry consultant who has recently developed an EAM loss prevention and asset optimization software product derived from various spreadsheet-based tools (consisting of business methods, practices, KPIs, scorecards, reports, data maps/views, etc.) which were central to the actual asset performance optimization/management and process safety improvement metrics and methodologies he implemented while working for both Marathon (23 years) and Chevron (10 years).

1. Operational Excellence
in Loss Prevention
Where are
we now?
Where do
we want to
go?
How do we
get there?
1
Michael Marshall LLC
Email: mtmarshall.llc@gmail.com

2. Operational Excellence
Plan
DoCheck
Act
• Manage risk
• Reduce costs
• Improve productivity
Operational Excellence
Focus Areas
• Risk management
• Process safety
• Operational reliability
• Equipment reliability
• Lost profit opportunity
• Management system
design (people, processes,
tools/technology)
• Operability, sustainability,
accountability
• Soft skills & involvement
Processes
• Project planning
• Workshops
• Gap analysis
• Corrective action
planning & tracking
• Implementation planning
• Training
Solutions
• Asset integrity & health analysis
• Bad actor detection & optimization
• Asset criticality analysis
• Risk analysis & prioritization
• Risk management & mitigation
• Performance benchmarking
• Production loss analysis
Protocols
• Industry best practices
• Metrics, KPIs, reports
• Change management
• Auditing processes
• Incident investigation
• Root cause failure
analysis
• Hazards assessment
• Risk response critieria
• Emergency planning &
response

3. Where are we now?
• 2005/10 BP, 2010/14 Tesoro, 2012 Chevron, 2013
Williams, 2014 DuPont, 2015 DCRC and 2015/16
ExxonMobil incidents…driving PSM reexamination
– Not a failure of equipment, procedures or training
– Management system failure
• US Oil & Gas industry losses highest of any sector
– US Refining industry accident rate is 3 to 4 times that
of Europe
• PSM rule quickly falling out of favor with regulators
– Safety Case and ALARP used throughout Europe now
advocated by the CSB
– California and CSB proposal for Inherently Safer
Design (ISD)…reduce risk to greatest extent possible
- Major Events Have Increased Industry Scrutiny -

4. 4
API RP 754 “Process
Safety Performance
Indicators for the
Refining and
Petrochemical
Industries”
• Tier 3 and 4 data hold the
key to avoiding Tier 1 and
2 events
• Safety and profitability go
hand in hand

5. 5
API RP 754 “Process
Safety Performance
Indicators for the
Refining and
Petrochemical
Industries”
Major
Minor
Near Misses
KPIs
• Tier 3 and 4 data hold the
key to avoiding Tier 1 and
2 events
• Safety and profitability go
hand in hand

6. Where do we want to go?
• Where is the risk?
• How should it be managed?
Risk
• What are the compliance needs?
• Where is the most vulnerability?Regulatory
• How can operational health be measured?
• How can safety systems be optimized?Operations
• What are the economic impacts of LOPC?
• How is lost profit opportunity measured?Profits
• How can sustainability be ensured?
• Define who, what, when, where, and how
Continuous
Improvement

7. PSM: OSHA 1910.119 elements

8. PSM: OSHA 1910.119 elements
PSM Plus TM – Leverage process
safety programs to improve
performance and add value
• Safety and Environmental
 Reduce fires and explosions
 Reduce spills and releases
 Reduce near misses
• Utilization
 Increase mechanical availability
 Reduce unplanned outages
 Reduce production losses
• Reduce maintenance costs
 Achieve best in class
performance

9. Time Value of Data
“If you can’t measure it, you can’t manage it”
• Automated data retrieval, consolidation and analysis
• Near real-time data availability
• Access to equipment data for ad hoc queries
• Better analytics and KPI dashboards, reports and benchmarking
• Rapid problem-solving for systemic root cause determination

10. Case Study: Multi-refinery International Oil Co.
• Collect incident data across units/areas/refineries
and benchmark performance by:
– Incident type and classification
– Equipment category and type
– Unit and process type
– Operating mode
– Process anomaly
– Equipment failure mode and causal factor
– Damage mechanism
– Basic cause category
– Safety system and failure mode
– Department
– Contributing factor
– Risk (C/L/R) ranking and response criteria
• Form deep-dive teams and perform root cause
failure analytics

11. Common Tier 3 and 4 Failure Trends
• Pumps: Determined to be least reliable equipment type
– Upgraded lubrication design
– Instituted vibration technology and diagnostics programs and training
– Trained operators on proper startup techniques
• Compressors: Root causes of failure not due to machine mechanics
– More often due to equipment peripherals, ESD design and mis-operation
• Heat Exchangers: Throughput limitations
– Due to excessive fouling tendencies of 45° tube pitch design and water side
high temperature
• Heaters: High excess air operation, overfiring and flame impingement
– Created refinery optimization teams with technologist oversight
– Improved firebox diagnostics with skinpoint TCs and thermal imagery tools
• Block Valves: High incidence of leakage when closed for isolation
– Resulted in leak testing new/reconditioned valves prior to installation
• Personnel: Human factors and management system failures, not error

12. Results at Multi-refinery International Oil Co.
- Refining-wide benefits over five years -
• SAFETY: 27% reduction in PSM and environmental incidents
– 24% reduction in fires and explosions
– 39% reduction in spills and releases
– 48% reduction in near misses
• UTILIZATION: Improved equipment reliability and asset utilization
– Increased mechanical availability by 1.5% overall (up to 5% at some sites)
– Reduced production losses by 47%
– Reduced unplanned outages by 25%
• COSTS: Reduced maintenance costs by 18%
– Achieved maintenance costs of 2% RAV at most sites (< 3% at others)

13. Examples of charts
used for analysis

14. Examples of charts
used for analysis
Risk
Productivity
Costs
KPIs

15. How are we going to get there?
• Leverage OSHA process safety management programs to
improve performance and add value
• Implement a formal process for incident and information
sharing, report generation and cost measurement
• Establish performance measures and benchmarking KPIs
• Gather and disseminate information used for data analysis
and performance reporting
• Develop and implement improvement plans for resolution
of trouble areas and bad actors
• Integrate maintenance, operational and process safety
data resulting in procedural and behavioral synergies
• Optimize information management systems
• Improve design reliability and operability
• Identify and apply cost effective new technology

16. Plan
DoCheck
Act
• Manage risk
• Reduce costs
• Improve productivity
Operational Excellence
Loss Prevention
Management System
Managerial
Plan
• Develop strategic
purpose & vision
• Identify stakeholders
• Review policies, EHS
laws & risk tolerance
• Establish rules, goals &
targets vs. key drivers
• Assess workforce,
resources & assets
Do
• Develop charter
• Establish oversight
committee
• Initiate training
• Communications plan
• Programs, systems,
processes vs. schedule
Check
• Corrective action
• Audit process (Tier 2)
Act
• Management
review…adjust
Technical
Plan
• Form team(s)
• Compile data & info
• Draw workflows
• Perform gap analyses
• Establish baseline
Do
• Design metrics, KPIs,
reports & tools (tech)
• Write procedures
• Rollout new plans &
work processes
• Install automation
tools & software
• Initiate training
Check
• Perform root cause
analyses
• Review performance
targets
• Audit process (Tier 1)
Act
• Assess gaps, costs &
tradeoffs…adjust
Communication and
involvement are key!