The document discusses operations excellence in managing aging assets in the oil and gas industry. It notes that maximizing economic recovery from mature basins has been a key priority in the UK and Middle East, which has the largest number of assets now beyond their original design life. It also discusses the challenges of a declining skilled workforce as many engineers near retirement. The document outlines strategies for operations excellence, including focusing on production enhancement, cost reduction, and safety while extending asset life. Specific approaches covered include reliability centered maintenance to optimize maintenance programs and production management frameworks to improve output. Throughout, it emphasizes the importance of organizational culture and skills development to successfully implement operations excellence strategies for aging assets.

1. Operations Excellence in the
Management of Ageing Assets
Presented at 2016 Abu Dhabi International
Petroleum Exhibition & Conference
Tony Geraghty – Advisian

2. Operations Excellence
for Mature Assets

3. Why is this important now?

4. UK GOVERNMENT PRIORITY – MAXIMIZING ECONOMIC RECOVERY
Maximizing economic recovery from a mature basin has been a key
Government priority in the UK.
1
MIDDLE EAST – LARGEST NUMBER OF AGEING ASSETS
The Middle East has the largest proportion of assets which are now beyond their
original design life.
2
SKILLED DEMOGRAPHIC DECREASE
Adding to the age of the facilities is a challenging demographic profile for
skilled people. 50% of skilled engineers will retire in the next decade.
3

5. Sir Ian Wood, Chairman of Wood Group, was
commissioned to write a report for the UK
government, pertaining to:
• Asset stewardship, infrastructure and
decommissioning strategy
• Management of the UK Continental Shelf
natural resources
• Importance of operations excellence in
management of late life and ageing assets
UK GOVERNMENT PRIORITY – MAXIMIZING ECONOMIC RECOVERY
Maximizing economic recovery from a mature basin has been a key government
priority in the UK.
1

6. MIDDLE EAST – LARGEST NUMBER OF AGEING ASSETS
The Middle East has the largest proportion of assets which are now beyond
original design life.
2• It is estimated that nearly 70% of the 700-800 fixed offshore platforms
and bridges in the Middle East are over 25 years old1
• Many running at maximum installed capacity
• Regional demographics of assets by 2012 production2:
1 DNV GL. (2016, July 31). Middle East rises to age challenge
2 Source: Rystad
68%
5%
14%
13%
Middle East
Pre-1985
1985-1994
1995-2004
Post 2005
38%
14%
23%
26%
Rest of the World
Pre-1985
1985-1994
1995-2004
Post 2005

7. SKILLED DEMOGRAPHIC DECREASE
Added to the age of the facilities is a challenging demographic profile for
skilled people. 50% of skilled engineers will have retired in the next decade.
3
Per age bracket on a global basis
More than 25% of Petrotechnical Professionals (PTPs) are over 50 years of
age and a significant majority will have retired by 2016, leaving a young
professional majority.

8. Number of PTPs on a global basis 2011-2025
3We are currently experiencing the lowest number of
experienced Petrotechnical Professionals (PTPs).
SKILLED DEMOGRAPHIC DECREASE
Added to the age of the facilities is a challenging demographic profile for
skilled people. 50% of skilled engineers will have retired in the next decade.

9. Operations Excellence Strategy:
What are the key components?

10. Enhance production
An operations excellence strategy has three objectives and three work
streams for delivery:
Advisian / 10
Reduce operating costs
Safeguard (or improve) safety performance
T
e
x
t
Three Objectives
A bespoke
approach to
individual assets
to deliver ROI
Production Excellence Maintenance ExcellenceAsset Life Extension
Three Work Streams
Woven throughout these work streams is the fact that the management of your human capital will be
the ultimate determinant of creating a successful and sustainable change

11. Example ALE study
Overall cost (estimated)
• Asset Life Extension (ALE) reviews remnant
asset life to ensure ongoing reliability and
integrity
• An ALE Strategy safely and cost-effectively
manages assets when approaching or
operating beyond design life
• Example ALE study in a client facility:
‐ ALE options (Run, Repair, Rehabilitate, Re-
design, Re-rate, Replace, Retire) compared
using a cost-risk optimization methodology
‐ Review of modification portfolio to reduce
operations CAPEX by 15-25%
• This must be coupled with an objective
measurement of the management system
Asset Life Extension
1-5 years 6-10 years 11-15 years 16-20 yearsCostEstimate(MUS$)
Civil Electrical I&C Rotating Static
• Electrical Major items – HV motors, switchgear, SCMS
(ageing, obsolescence)
• I&C major items – systems upgrade (obsolescence)

12. Define Maximum
Production Potential
(MPP)
Forecast
Production
Measure
& optimize
production
Review &
manage
loss
Review &
realize
Locked In
Potential
(LIP)
Generate
opportunities
Concentrate on high
priority issues
Prioritize next steps Summarize
Understand assets
constraints
Production Management Framework (PMF) is a
complementary set of tools that seeks to
embed operations excellence into the day-to-
day running of the business
An example PMF within the UAE:
• Majority of losses (including LIP) were found
to be hidden from leadership
• Developed understanding of true technical
limits and measured operational efficiency
against technical constraint
• Teams able to identify threats to production
• Methodology identified 60k BOED of LIP not
being aggressively targeted and a true daily
level of daily losses up to 40K BOED
• Losses were identified through Produce the
Limit (PtL) Workshop and our Production
Management Healthcheck
Production Excellence
Production Excellence means paying attention to everything!
PMF

13. • The choke model illustrates where effort needs
to go to secure improvement
• In the model below, the lowest choke is the
commercial one
• However, daily performance is well below that
point – hence described as a performance loss
• If the commercial choke could be raised to the
next level, this is counted as a Potential Loss
• The choke model is then deployed at the centre of
the management system
• It becomes the benchmark against which all
production performance can be judged
• It is characterized by a ruthless attention to detail
• We have seen uplifts of 10 to 15% in daily
production once this is in place
Production Excellence
Production Management Framework requires the use of an
accurate and updated Choke Model

14. • We use a process called Production
Management Healthcheck to give
a clear and unbiased view
• This allows a client to see exactly
what needs to be worked on
• Experience has shown that we aim
first for compliance
• For organizations that have simply
reported daily production prior to
this, it represents a profound change
The reason this is so hard is that upstream
companies have never really been set up
to reward such behaviors – prior to this it
was all about project execution
Securing improvement starts with an objective measurement of the
current level of achievement.
Production Excellence
Example client Healthcheck result
*ECS = Execution Control System
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Define Potential
(Production Delivery)
Production
Forecasting
Loss Management
(PLMS)
Measures & Optimize
Performance
Locked In Potential
(LIP)
Production ECS*
Management System
Excellence Lower limit Excellence Upper limit Compliance

15. Maintenance Excellence
Implementing true Maintenance Excellence accesses a very rich area
for improvement
In the 1970s, the civil aviation industry created a process called ‘Reliability Centred
Maintenance’ (RCM) which allowed them to ensure they were doing the right things,
at the right time, and did so without wasting money.
They describe it as,
“A process used to determine what must be done so that a physical asset continues to
fulfil its intended functions within its present operating context.”
Many operators are either unaware of or have forgotten critical elements of the intended
functions which has a profound effect on the selection of the appropriate maintenance
policy.
Moreover, the operating context of the plant will have changed so much during its
operational life that the original maintenance choices are unlikely to be suitable for today’s
challenges.

16. The Challenge
• Planned instrument maintenance costs were too high
• ISO 9000 accreditation had made the planned maintenance
program very expensive
• Any changes would need to satisfy the UK offshore regulators
prior to any implementation
Approach
• A thorough examination of the instrumentation with a view to:
• their criticality
• their dominant failure modes
• their target availability
• Developed a completely new program with the asset team
• Managed the process with the HSE offshore safety branch to
ensure regulatory compliance and acceptance
• Implemented the changes offshore
Benefits
• Reduced the instrumentation planned maintenance program
from 15,000 man-hours a year to just 1,800 man-hours a year
• Reduction in POB
• A marked reduction in the number of spurious trips
IOC 1 (inst Man-hours)
After
Before
1,800
15,000
-88%
Maintenance Excellence
For instance, are all your “Critical
Instruments” still “Critical”?

17. The Challenge
• Their business model for industrial turbine packages has been
redefined by the move to long term service agreements
(LTSAs) where they now pay for the cost of maintenance
Approach
• The Client asked Advisian to assist in reviewing and re-
defining the work programmes to ensure that each task was
sensible, defensible and occurred at the appropriate interval.
• The analysis also examined possibilities to make design
changes to facilitate better maintenance.
• In all, the engagement delivered a valuable reduction in the
maintenance programme, coupled with a new approach to
control and protection philosophy, allowing the Client to de-
tune overly sensitive instrumentation to provide the End-User
with Alarms as opposed to Trips.
International OEM 1 (inst Man-hours)
After
Before
432
984
-56%
Maintenance Excellence
Even your OEMs cannot deploy
the maintenance policies they had
previously recommended, so why
should you?
Benefits
• 56% reduction in maintenance labour costs for 8,000 running hour interventions
• Availability improvements of at least 1.5 days per year per gas turbine from planned maintenance alone
• A reduction in Control and Instrumentation Engineer resource requirement of around 60%

18. However, once again, you will have to take a good look at your
organization to assess how easy these benefits are to access
Most organizations are implicitly aware that their planned maintenance regime is over-burdensome, so
decisions are being made about what tasks to leave out. This is normally decided at the front-line.
Current
situation
Real
Potential
Illustrative onlyActual client example
88% reduction
1.
Evaluate the
current workload
2.
Carry out RCM
process
3.
Result in a
significant reduction
in work orders (88%
decrease)
4.
Result does not map
on to actual
manpower figures,
i.e. how much of
workload is currently
under execution?
5.
Factoring actuals, a
30% reduction
30% reduction
Current
situation
RCM
Potential task
reduction
Adjustment for
actuals
Real potential
realized
Workhours issued
Hours
required
Hours expended
Hours required

19. The challenge is to embed these new
techniques into your organization by
working with your people
People
• Tailored org. structure
• Clear roles and resp.
• Capability development
• Performance mgmt.
Business processes
• Best practices (e.g. RCM)
• Integrated value chain
• High capability
• Fast & cost effective
Management system
• KPIs and score cards
• Linked to strategy
• Decisions and actions
• Accountabilities
Performance culture
• Learning organization
• Always testing the current
• Continuous improvement
Behaviors
• Fact based dialogue
• Team based vs. individual
• Embedded & ingrained
Results
• Delivered and sustained
• Owned by organization
• Achieved by organization

20. If you have any questions, I would be delighted
to discuss them.
You can contact me directly at
anthony.geraghty@advisian.com
You can call me on +44-7717-346660
The author would like to thank his colleagues Gavin
Hall, Mark Chamberlain, James Nightingale and Ian
Jones for their contributions to the paper.

22. DISCLAIMER
This presentation has been prepared by a representative of Advisian.
The presentation contains the professional and personal opinions of the presenter, which are given in good faith. As such, opinions presented
herein may not always necessarily reflect the position of Advisian as a whole, its officers or executive.
Any forward-looking statements included in this presentation will involve subjective judgment and analysis and are subject to uncertainties, risks and
contingencies—many of which are outside the control of, and may be unknown to, Advisian.
Advisian and all associated entities and representatives make no representation or warranty as to the accuracy, reliability or completeness of
information in this document and do not take responsibility for updating any information or correcting any error or omission that may become
apparent after this document has been issued.
To the extent permitted by law, Advisian and its officers, employees, related bodies and agents disclaim all liability—direct, indirect or consequential
(and whether or not arising out of the negligence, default or lack of care of Advisian and/or any of its agents)—for any loss or damage suffered by a
recipient or other persons arising out of, or in connection with, any use or reliance on this presentation or information.