“Ageing Plant and Life Extension”Ageing Plant and Life Extension

Steve Walker: Head of HSE Offshore Division

IOSH East Anglia Branch

21 September 201221 September 2012

“Ageing Plant and Life Extension” Presentation OutlinePresentation Outline

• Introduction

• Brief introduction to the offshore industry

• Presentation of HSE’s Key Programme 4 (KP4) - Ageing and life extension offshore( ) g g

• Look at parallel ageing challenges elsewhere in the major hazard sectorsj

• Explore whether ageing and life extension can be issues for non-major hazardcan be issues for non major hazard sectors

North Sea beginningsg g

• Offshore industry started 1960s

• Little safety regulation

• 1965 S G• 1965, Sea Gem jack-up (self-elevating barge) g g )collapse killed 13

Piper Alpha - 1988p p

R l f f t• Removal of safety valve, with poor permit of work systemp y

• Explosion, leading to a crude oil fire, fuelled by continuing production from adjacent platformsj p

• 167 died, 62 survived.

Piper Alpha Cullen Inquiryp p q y

Id tifi d f Pi• Identified causes of Piper Alpha fire

• Recommended transfer of responsibility of offshore safety to HSE – 1991

• Safety Case regime set y gup – new legislation 1992

• Review of legislation, and replacement by goal-replacement by goalsetting requirements

UK Oil & Gas production facts p

40 billi b d ith 15 25 billi• 40 billion boe recovered, with approx 15-25 billion boe remaining

• 16th largest oil & gas producer in world• 16th largest oil & gas producer in world.

• >350 fields and approx 280 offshore installations

• S t 380 000 j b• Supports 380,000 jobs

• Currently meets 70% of UK oil & gas demand, and still liable to meet 50% in 2020still liable to meet 50% in 2020

• Oil price $34 Dec 07, $147 July 08, $40 Dec 09, $110+ now (Sept 12)$ ( p )

Offshore Fatal and Major Injury Rate 1998/1999 2011/121998/1999 – 2011/12

250

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150200250

00,0

00 w

o

50

10050

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Offshore over 3-Day Injury Rate 1998/1999 2011/20121998/1999 – 2011/2012

10001200

rker

s

600

8001000

0,00

0 w

or

0

200400

ate

per 1

00

0

1998

/9919

99/00

2000

/0120

01/02

2002

/0320

03/04

2004

/0520

05/06

2006

/0720

07/08

2008

/0920

09/10

2010

/1120

11/12p

Inju

ry ra

1 1 2 2 2 2 2 2 2 2 2 2 2 20

Offshore Hydrocarbon Releases2002/2003 2011/20122002/2003 – 2011/2012

180

200

120

140

160

ease

s

60

80

100

No.

of R

el

0

20

40

03 04 05 06 07 08 09 10 11 2p

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/1120

11/12p

Minor Major/Significant

Deepwater HorizonpGulf of Mexico 22 April 2010: 11 killed

Release of 4.9 million barrels of oil(170 million gallons)(170 million gallons)

……and potential effect in the UK/Europe?

Elgin gas leak – 25 March 2012g g

• On Sunday 25th March• On Sunday 25th March 2012 a sudden gas release occurred on the Elgin wellhead platform

• 238 workers on the Elgin complex and Rowan Viking safely evacuated over next 13 hours

• Initial release around 2kg/sec (170 tonnes/day)

• Top kill of Well G4 pcompleted on 19 May

• Over the 52 days, estimate of 6172 tonnes of hydrocarbons releasedof hydrocarbons released

Background to Key Programme 4.g y g

Ageing and life extension in the offshoreAgeing and life extension in the offshore industry

UKCS Installations (BERR)

300

on

200

250

n pr

oduc

tio

Small steel jacket108 installations >25 ld

146 installations >20 years old

150

stal

latio

ns in

Large steel jacket

Jackup

C t GBS

>25 years old

100

of U

KC

S in

s Concrete GBS

Semi-sub

FPSO

0

50

No

o

TLP

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Year of first oil/gas

WHAT IS AGEING?

Evidence of degradation and damageEvidence of degradation and damage

ORInsufficient knowledge / information to know the extent of possible deterioration

________________________________

Need to consider effects of:

accumulating or accelerating damageg

modifications obsolescence changes of process & / or well

conditionsconditions advances in knowledge and

technology organisational issues / loss of

corporate knowledgecorporate knowledge

The ageing/life extension conundrum….

• Traditional models of dwindling reserves & increasing O&M costs predict end of life

KP3: ASSET INTEGRITY2004 - 20072004 - 2007

• 100 Installations inspected (40% of the total)• 100 Installations inspected (40% of the total)

• Significant issues on the maintenance of safety critical systems:– Use of maintenance system– Use of ORAs– Role of technical authority

Sh i d ti– Sharing good practice– Use of verifiers– Use of KPIs by senior management

Maintenance backlog– Maintenance backlog

• KP3 report:– Published October 2007 – Findings accepted by Industry

KP3 OUTCOMES

• 20th Anniversary of Piper Alpha• 20th Anniversary of Piper Alpha– 6 July 2008– Secretary of State commissioned KP3 review

• Review performed by HSE– Report published in July 2009– Good progress, considerable resource and effort– Improvements implemented but considerable work

still required

• KP3 was about managing ‘here and now’ conditionsKP3 was about managing here and now conditions…. but what about managing future conditions for further ageing and potential life extension?

Hence KP4!

CONTEXT FOR KP4

• Future reserves: up to 25 billion barrels of oil 25+ yearsFuture reserves: up to 25 billion barrels of oil 25 years

• Steady demand for oil and gas for foreseeable future

• Over 50% of platforms have exceeded their design lifep g

• Findings of KP3: Asset Integrity (2004-2007) plus plateau of HCRs

• Technological developments continue

– enhanced oil recovery etc.

– existing offshore infrastructure essential for some marginal field developmentsdevelopments

– CO2 sequestration, gas storage etc. opportunities

• Safety management system requires consideration of:Safety management system requires consideration of:– ‘Ageing’– Implications of ‘life extension

Key ageing/life extension issuesy g g

• Ageing/deterioration• Ageing/deterioration– External/internal corrosion– Structural degradation/failure (e.g. fatigue)– Backlogs of maintenance

• Changes in process conditions over time• C l ti ff t f difi ti• Cumulative effect of modifications• Obsolescence• Information capture/retention (IT + human!)Information capture/retention (IT + human!)• Advances in knowledge/technology• Improvements in good practisep o e e ts good p act se• Anticipation of changes

What is Ageing? RR509 (2006)RR509 (2006)

• The management of equipment begins with an awareness that ageing is not about how old the equipment is, but what is known about its condition, and the factors that influence the onset, evolution and thence mitigation of its degradation. O h f i d d d d d f• Once the symptoms of ageing are understood, and detected from inspection, a decision can be made how to proceed. The options can include putting together a case to justify continued service, re-rating, repair, or scrapping the equipment.repair, or scrapping the equipment.

• There are also managerial issues that should also be considered. The company culture and defined roles and responsibilities are important in relation to managing equipment. g g q p

• Ageing management is also affected by staff demographics, skills, training and competencies.

• Keeping documentary information and records throughout equipment life• Keeping documentary information and records throughout equipment life is important.

KP4 2010 - 2013

Key Programme 4 (KP4) on Offshore Ageing and Life Extension

• AIM:To ensure that the risks to asset integrity associated with ageing and lifeTo ensure that the risks to asset integrity associated with ageing and life extension are controlled effectively:

• Doing work now, for improved integrity management/safety in the future

• Seeking industry recognition of the importance of Ageing and LE– Key element of the asset integrity management (AIM) system – Senior management involvementg

• Integration into corporate safety culture– e.g. corporate policy, safety cases, thorough reviews

• Development of long-term asset integrity plans

KP4

• Launch in July 2010

• Significant stakeholder work to raise overall awareness and stimulate industry-wide work, especially guidance and good practisey , p y g g p

• 15 Duty Holder inspections to date (September 2012)

– Inspection of Asset Integrity Management (AIM) systems - not installation specificspecific

– Primarily onshore with offshore sampling - broad range of topic areas

– Focus on Safety Case Thorough Review

– Used KP4 topic based templates (including traffic lights) (POPMAR model)

– Process = kick off, onshore, offshore, close outProcess kick off, onshore, offshore, close out

OSD AGEING WEBPAGE

• Primary source of information on ageing offshore installations

• www.hse.gov.uk/offshore/ageing.htmg g g

• To provide information on:

– Press releases– Inspection findings– Operational issues– Standards, technical / guidance , g

documents– R&D– Industry meetingsy g– Relevant websites (e.g. PSA, EI)

AGEING AND LIFE EXTENSION NETWORK

• Managed by Oil and Gas UK under STEP CHANGE• Managed by Oil and Gas UK under STEP CHANGE

• 90 members, operators, ICPs, designers, contractors, plus HSE

• Purpose• Purpose

– share good practice

identify key elements in ageing processes– identify key elements in ageing processes

– develop guidance

• O&G UK work group developed “Guidance on the Management of Ageing and Life Extension for UKCS Oil and Gas Installations” in April 2012 – see http://www.oilandgasuk.co.uk

Overview of KP4 progress so farp g

• KP4 Interim Report due October 2012KP4 Interim Report due October 2012• Offshore industry has responded well to KP4 – ageing/life

extension now firmly “on the map”G d ti b i t d b O&GUK• Good practices being captured by O&GUK

• Good evidence of Duty Holder senior management have responded positivelyp p y

• Recognised as a business issue• ALE policies/procedures developed• KP4 task groups created• KP4 task groups created• Some allocating personnel with specific ALE

responsibilities.KPI “dashboards” for ALE• KPI dashboards” for ALE

KP4 good practicesg p

G t h i lit d it i f• Greater emphasis on quality and monitoring of Operational Risk Assessments (ORAs) for degraded plantg p

• Auditing of defined life repairs

• Undertaking ALE gap analysisUndertaking ALE gap analysis

• Obsolescence Reviews

• “Life of field” structural integrity conditionLife of field structural integrity condition assessments

• Extensive fabric maintenance – most visible!!

IMPROVEMENTS OFFSHORE

BUT………..

• Existing work loads are very high meaning• Existing work loads are very high, meaning taking time out to consider ALE issues is difficult.

• Fabric maintenance still a challenge, with id d CUIwidespread concerns over CUI.

• Need for better appreciation of ‘Ageing’ and planning for Life Extension, and day-to-day p g y ymanagement - further integration into mainstream asset management

• Auditing and verification needs to be improved ud t g a d e cat o eeds to be p o edfor ALE

• Work will be needed to implement industry good ALE practicesALE practices.

• Offshore environment will remain a challenge….

However, is ageing/life extension a h lth d f t i l h ?health and safety issue elsewhere?

Onshore major hazard industryOnshore major hazard industry

• E t l h 2008/09 RR823 Pl t• External research 2008/09 – RR823 Plant Ageing Study

• Review of European incident databases 1980 -Review of European incident databases 1980 2006, showed ageing caused:

– 28% of loss of containment incidents with MA potentialpotential

– 50% of events arising from technical plant– failure incidents led to

• 11 deaths• 183 serious injuries

€170M economic losses• €170M economic losses

UK Competent Authority (HSE/EA) p y ( )Strategic Priority on Ageing Plant

• 2011 : 74% of sites failing to meet expectations• 2011 : 74% of sites failing to meet expectations– Across the 5 mechanical topics

• Performance at 25% of sites is assessed as unacceptable– Significant improvement needed urgently

• Performance at 49% of sites is assessed as only partially• Performance at 49% of sites is assessed as only partially compliant

– Legally enforceable improvements are required• Performance at 26% of sites is assessed as acceptable

– Minimum legal requirements metMinimum legal requirements met• Findings from the CA’s intervention programme on ageing plant

do not provide much comfort!

• 2012 : Slight improvement - 70% of sites still failing expectations2012 : Slight improvement 70% of sites still failing expectations

Ageing plant management remains a significant challenge for process industriesp

But what about non-major hazard jsites?

• Current economic environment means everyone• Current economic environment means everyone has to squeeze their assets, with inevitable “life extension”:

• “let’s put off that car park maintenance until• let s put off that car park maintenance until the lease runs out”

• “that boiler will run for another couple of winters won’t it?”winters, won t it?

• “do you really mean that lifting strop is too old – surely we can still use it”

• “we can’t afford to replace that database• we can t afford to replace that database –can’t we keep on running the old system?”

• “now you tell me the ventilation plant can’t cope with the new production line!”cope with the new production line!

• A i d i th f t ill b k i• Ageing now, and in the future, will be a key issue in all sites

• Consider the range of ageing/life extensionConsider the range of ageing/life extension issues in your environment

• Obsolescence – “kit”, “software” and workforceworkforce

• Damage and deterioration• Equipment approaching end of life• Cumulative effects of modifications• Improvements in technology

Standards/legislati e/societal changes• Standards/legislative/societal changes

But not just a “Safety thing”But not just a “Safety thing”

• Ageing and life e tension iss es are intricatel tied p• Ageing and life extension issues are intricately tied up with commercial and economic issues

• Sometimes ageing safety risks is too remote, too far in future or difficult to quantifyfuture, or difficult to quantify

• Don’t rely solely on complex technical arguments, instead introduce business risk concepts - present ageing risks to senior leaders as commercialageing risks to senior leaders as commercial, reputational and financial risks (as well as safety!).

• Provide real and focused evidence and data that highlights where systems have or will deteriorated in ahighlights where systems have or will deteriorated in a format that can be readily understood by senior managers – and include the potential consequences

• Seek independence in engineering decisions associatedSeek independence in engineering decisions associated with ageing/life extension

Ageing and Life Extension LeadershipAgeing and Life Extension Leadership

• Know your assets• Know your assets • Be an Intelligent Customer• Ensure that the leadership understands andEnsure that the leadership understands and

recognises the significance of ageing challenges -send senior managers onto Process Safety Leadership training? p g

• Recognise existing problems and have plans to correct

• Develop long term strategies for each site with a• Develop long term strategies for each site, with a clear vision of the future– Enables engineering teams to propose

appropriate investment optionsappropriate investment options

Ageing and life extension – you can g g ychoose which “Richards”

Do a CliffCliff….

….or do a Keith!

Questions?