Maximizing capital efficiency in oil and gas.
Implementing effective asset management in the oil and gas sector is a complex and multi-faceted task. From exploration and drilling to production, processing and transportation, it requires deploying a long list of mechanical and electrical equipment, often in hard-to-reach places such as offshore platforms. Then, there is the consideration of accelerated aging in corrosive atmospheres, all while complying with a rigid regulatory environment to ensure safety and protect vulnerable ecosystems.
No wonder that oil and gas companies spend a significant part of their revenues managing assets on platforms, rigs, and pipelines – ensuring their ability to function efficiently. In this context, Enterprise Asset Management (EAM) is an invaluable tool that allows oil and gas companies to efficiently manage physical assets and infrastructure throughout their lifecycles – from design and procurement to maintenance and disposal. Indeed, the latest research says that the global oil and gas EAM market is growing by approximately seven percent per year (CAGR) and will reach a predicted annual value of $6.2 billion by 2032. That’s quite some outlay at a time when many organizations are trying to streamline operations to boost returns.
The growing imperative for EAM in a high-stakes industry
So, how can asset managers in the oil and gas industry work smarter and more collaboratively to increase productivity, optimize plant conditions, and minimize downtime while meeting their sustainability and safety goals? The answer comes through implementing an enterprise asset management (EAM) solution, which is a collection of software, systems, and services that can effectively manage the maintenance of physical assets throughout the lifecycle. Most EAM software provides an intuitive ability to manage assets, work activities, and costs, simplifying health, safety, and environment (HSE) compliance, and futureproofing processes. This granular information is supplied in a clear and concise manner, with data available on both desktop and mobile devices for ease of use.
Indeed, EAM adoption has been shown to bring significant benefits to oil and gas companies by digitizing assets to boost transparency and collaboration, improve documentation, and maximize access to data and knowledge. Consequently, EAM has emerged as a vital tool, yet its adoption does not come without challenge.
Understanding the EAM maturity model: from reactive to ultimate strategies
Let us look at EAM in greater detail, starting with adoption rates. The latest IFS EAM Trend Report, which is based on the responses of several hundred asset managers, many of whom work in oil and gas, shows that 63 percent of respondents are currently using an EAM solution, with this figure creeping up year-on-year. The Trend Report also indicates that the application of EAM differs dramatically from one company to another. This is reflected in the five-stage maturity model (see graphic), with stages 1 and 2 based on reactive and corrective maintenance, while stage 3 indicates ‘proactive’ approaches such as condition-based maintenance, while focusing on increasing asset reliability and HSE compliance. Stage 4, meanwhile, is characterized by ‘smart’ EAM adoption, enabling a predictive maintenance approach. Examples include risk-based maintenance and APM integrations. Stage 5 is the ‘ultimate’ approach where the software is utilized for all the previously mentioned aspects, and it extends to areas like financial optimization and business analytics.
The maturity figures are revealing. When respondents were asked to identify the stage that best represents their organization’s maintenance strategy, the vast majority places themselves in stages 1 and 2. Only 12 percent said they’d reached stage 3 proactive, and a combined percentage of just over seven percent of all asset managers said their organizations had already reached stages 4 or 5. Clearly, there is some way to go before the full maturity of EAM across industries and oil and gas as a whole.
Expediting maturity: emerging technologies shaping EAM evolution
With this in mind, what might help companies move more quickly along the maturity model, helping them make better use of available EAM tools? To answer that question, it is worth looking at the wish list for asset managers in terms of the emerging technologies that they think will give them a competitive advantage.
The IFS EAM Trend Report found a clear hierarchy of ‘wants and needs’, focused on better use of Internet of Things (IoT) technologies, improved predictive modelling, and the successful adoption of Artificial Intelligence within their operations. EAM has clear potential to accelerate progress in all three areas. For instance, top of the line EAM systems provide excellent visibility of the condition and performance of distributed equipment such as sensors, supporting digitalization and making better use of reporting and analytics.
More recently, AI has been increasingly integrated into EAM platforms to enhance capabilities. Recent examples include AI-driven troubleshooting based on intelligent assessment of the maintenance history of critical assets, leading to improved failure reports, faster diagnosis and an overall lower mean time to repair. Another example is the introduction of AI assistants to perform tasks in EAM platforms using natural language rather than having to navigate through screens and forms. Meanwhile, high-priority job ranking functionality can provide invaluable help and direction to maintenance departments struggling with unstructured workloads.
Finally, EAM provides significant benefits for knowledge retention and dissemination. The IFS EAM Trend Report revealed that recruiting and retaining experienced staff remains a consistent internal disruptor in the oil and gas industry. EAM systems provide a well-structured repository of technical asset management knowledge that can be stored for the future. This turns the EAM platform into a centralized hub and bespoke system, resonating well with the new generations of tech-savvy workers.
In conclusion, effective enterprise asset management is critical in enabling safer and more efficient operations within oil and gas companies. Now is the time to act to modernize and unlock EAM as a catalyst for achieving that goal.
By Berend Booms
For a list of the sources used in this article, please contact the editor.
Berend Booms is Head of EAM Insights at IFS Ultimo. IFS Ultimo, an IFS company, energizes the financial resilience, regulatory compliance and operational excellence for healthcare, manufacturing, and logistics businesses through its innovative software-as-a-service (SaaS) enterprise asset management (EAM) solutions. Focused on maintenance, uptime, safety, cost control, and efficiency, the company is known for rapid deployment, ease of use and an unparalleled time to value.