Increasing returns from asset management investment

April 14, 2013

The offshore industry is perhaps the single most demanding environment for assets. Exposure to the elements, the remote nature of drilling equipment, limited space, a volatile project-oriented environment, and risk management concerns, all need to be addressed by enterprise asset management software. The right application can, however, says IFS North America’s Patrick Zirnhet, meet the needs of companies, reducing cost, increasing productivity, and mitigating risk.

Patrick Zirnhelt is director of sales for asset-intensive industries for IFS North America. He has almost 20 years of experience working with enterprise systems, and is a professional engineer registered in Ontario. He holds an MBA from the York University, Toronto, and a BS degree in mechanical engineering from Queens University, Kingston, Ontario.An increased focus on asset integrity management (AIM) and risk management means that more rig owners and operators are reassessing their investments in enterprise asset management (EAM) software to ensure they have applications in place that are properly implemented and functional, help them ensure compliance with regulations, and adopt AIM best practices.

EAM software features can play a role in software project return on investment (ROI) for drilling contractors as can specific, discrete steps taken during implementation. The following concerns ought to be addressed by EAM software in the offshore oil & gas industry:


  • Inventory management
  • Cash and contract management
  • AIM and risk management
  • Support for industry standards
  • Document management for the asset lifecycle
  • Usability, ease of implementation
  • Offshore/onshore replication.

Serious about serialization

The offshore industry needs to track individual pieces of equipment over their lifespans at a very granular level. As each piece of equipment is deployed, a comprehensive record of service, repair, overhaul and other work performed upon it, is necessary. This requires the equipment be issued a serial number that the various work orders and project documents can be attached to.

Consider the level of documentation that is required for a key component like a blowout preventer. Imagine that BOP being deployed on a rig for eight months before being moved to shore-based storage. A year later, if it is redeployed on another rig, managers must be able to see the traceability/serialization record of that BOP. It is crucial that before the BOP goes into operation, there be a full history of inspections, work history, transport orders, preventive maintenance orders and even parts replaced over its lifecycle. Only then can management make intelligent decisions on the actual level of asset integrity of assets in the field. And that, all by itself, can contribute to ROI from the standpoint of risk management.

Inventory management

Selecting EAM that offers strong functionality beyond maintenance – specifically in the area of advanced inventory management – will drive more rapid returns.

EAM with strong purchasing functionality can help an offshore drilling platform owner improve procurement processes and strike a balance between having excess safety stock on the rig and experiencing downtime when a part is needed but not available. Establishing this balance is critical when considering the isolated nature of drilling rigs and vessels, which would tend to indicate that more stock is better than less. Conversely, the physical real estate to keep spare parts is limited, and as is the case with inventory in any business environment, too much inventory ties up operating capital that could be used to address other priorities in the organization.

One factor of inventory management that is important for the offshore industry is the ability to share inventory across multiple locations in a given region. Whether it is the Gulf of Mexico or the North Sea, platform operators and owners are often involved with multiple drilling projects in a region. This really amounts to a multi-site arrangement, which some EAM applications can handle more easily than others. It also requires a unique master ID for part identification. If each location is using a different language to refer to parts, true visibility and effectiveness is compromised. EAM for this industry must include standardized part ID so management can reduce the ongoing investment required to manage the asset.

If you look at a fleet of ships or jackup drilling rigs, there might be 100,000 different parts or objects in that asset environment. You might have 50,000 different spare parts in your inventory and all of these are named in a very localized way. That is because the part-naming convention was likely developed on each shorebase or rig over a period of years, and the problem may be a lot worse if the company has grown by acquisition – a common thing in the drilling industry. Therefore, it is impossible to know that a motor in company A, called Alpha, is the same motor as company B is storing under the name Beta. And the expected level that you need to have on the shelf is maybe 0.2 of this motor, which means you need to store at least one. But if you can treat five sites as one common unit with different inventory locations, you would be able to store just one motor to service all five sites.

Once inventory is received on a rig, EAM software for the offshore industry must also be configured to deal with the logistics including all manifests necessary to transfer the containers and other load carriers with equipment and spare parts on- and offshore. This will result in reduced cost for shipping and reduced downtime, increasing ROI from an EAM project.

Cash and contract management

A significant portion of the variable cost of offshore operations consists of the cost of contracts for supporting services and materials. EAM that is truly optimized for the offshore industry will take this into consideration and offer integrated contract management. Cash outlays necessary under each contract will be planned as the contract is finalized so cash flow decisions can be made accordingly.

The lifecycle of a contract with a supplier should be encompassed entirely within the EAM application, starting with call for bids on the project, acceptance of the bid and then the projected cash outlays and associated work performed by the contractor. This has benefits far beyond cash and contract management.

Asset lifecycle management supports decisions on asset integrity

Truly effective contract management is one way EAM can deliver to a company in the offshore indus- try a consistent view of all asset information – one version of the truth – insuring policies, plans, and actions, are based on an accurate understanding of the history and current status of asset infrastructure. In order to accomplish this, an EAM software product must actually address all phases of the asset lifecycle.

Not many do.

It must also provide portals or other methods for outside parties like engineering firms and maintenance contractors to use the system so that everyone touching that asset data is interacting with a single database in real-time.

AIM, risk management, permitting That one version of the truth – particularly related to data centralization about the asset – is another way that EAM software can deliver ROI to drilling contractors. AIM is important to any company that relies on heavy assets to achieve business results, but for the offshore drilling industry, where asset failure has an impact far beyond business productivity, it is positively critical.

Drilling contractors and rig owners can experience asset failures when they make decisions without complete visibility of the condition, status or current configuration of their assets. An EAM software application for the offshore industry should ideally be used to support asset design and construction, enabling the asset data to flow directly into the systems that will be used to sustain, maintain and operate the asset. This approach, known as ‘Design, Operate, Maintain,’ really involves a single asset management system that supports the asset over its entire lifecycle, cradle to grave.

The contract management tools have a role in true cradle to grave support because they ensure that the same enterprise system and data set is used regardless of who is making alterations to the asset.

EAM software for the offshore industry must also include configured workbenches for the offshore drilling industry with integrated permit and incident tracking built into the work order system. Increasing AIM visibility is one way to avoid injuries or deaths, and that is certainly one more way EAM software can deliver ROI. Indeed, more companies in the industry are realizing that in today’s environment, drilling without a truly effective EAM application that can document their maintenance activities and give them full visibility of the asset is just not responsible.

Industry standards

In an industry where asset failures can have safety and environmental implications, the amount of pressure to document compliance to safety standards is expected to increase. The most rigorous of these standards is NORSOK, which was developed by the Norwegian petroleum industry, based on the ISO 13628 standard.

From a compliance standpoint, support for NORSOK ought to be seen as a gold standard that is to be sought after in EAM software for the offshore drilling industry. The extent to which an EAM application offers a NORSOK compliance function ought to be key selection criteria.

Across all asset-intensive industries, another standard that is being taken seriously by more and more stakeholders is PAS-55 and the associated ISO 55000. This standard is specifically intended to cover the lifecycle of assets and in particular assets that are mission critical to the organization.

Usability, ease of implementation

In the offshore oil & gas industry as well as other industries, technicians and other front-line employees will not use a system that is confusing or presents functional barriers to their individual jobs. And there is no way that anyone can use a system until it has been implemented, so EAM software products that have a history of years-long or failed implementations are to be avoided.

For the drilling industry, an EAM application that allows a phased approach to implementation may be ideal. Mission critical elements like work orders, and document management to track the specifications of the asset as it is maintained, and inventory can be implemented immediately, allowing safe asset operation. Additional functionality including permitting, health & safety, and even full-blown reliability centered maintenance (RCM) functionality, can be implemented later.

Subpar implementability and usability are both potential barriers to a drilling contractor to realize ROI on an EAM software investment.

Documentation, asset lifecycle

For any number of reasons, including standards compliance and risk management, it is critical to have all of your asset data in a single repository. EAM software for the offshore industry needs to have integrated document management so as assets are set up in the system, all relevant CAD drawings, contracts, maintenance schedules, testing reports, and other documents, are stored in a central repository. These individual documents must also be linked to the asset object in the EAM system, which frankly not every EAM application will be capable of.

In a perfect EAM world, as new drillships or other assets are commissioned, a drilling company would be able to take the CAD serialized assets from the builder and pull them directly into their own EAM and document management system. Some EAM packages may be able to import the asset data, but lack the hooks into CAD and 3D CAD systems necessary to fully build those assets out into the system.

Integrated document management delivers an ROI by reducing the time it takes to find, manage and update documents relating to the asset.

On/offshore data replication

EAM vendors with a focus on the offshore industry offer a built-in data replication solution. While many offshore operators may run software that relies on a third party replication solution, EAM software with its own offshore replication functionality offers ROI benefits originating from both reduced cost and increased utility.

Replication involves one or more application databases onshore and one application database located on each offshore vessel or oil rig. Replication will keep business critical and transactional data at these sites more or less identical.

When the EAM vendor themselves offers the replication functionality, it is much easier for that data to be replicated at the application level instead of directly within the database. This means that data exchanged between systems goes through the data integrity controls built into the software.

Most data replication functionality focuses on transactional data rather than data objects because CAD drawings and other documents can be quite large. But the transactional data itself must in fact be replicated, and EAM software with built-in replication functionality will offer greater data integrity and cost less to license and implement than a third party solution that must be configured, integrated and then tested, hence, increasing ROI. OE

Current News

Strategic Marine Delivers Crew Boat to Centus Marine

Strategic Marine Delivers Crew Boat to Centus Marine

Thistle Wind Partners Win 2GW Worth of Offshore Wind Option Areas in Scotland

Thistle Wind Partners Win 2GW Worth of Offshore Wind Option Areas in Scotland

Norway: Inflation to Lead to Hefty Cost Increase in Offshore Oil and Gas Goods & Services

Norway: Inflation to Lead to Hefty Cost Increase in Offshore Oil and Gas Goods & Services

Scottish Offshore Wind Sale Nets Nearly $1B with Shell, BP Among Winners

Scottish Offshore Wind Sale Nets Nearly $1B with Shell, BP Among Winners

Subscribe for OE Digital E‑News

Offshore Engineer Magazine