Managing Change ASSET INFORMATION MANAGEMENT IN THE OIL AND GAS INDUSTRY

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1 Managing Change ASSET INFORMATION MANAGEMENT IN THE OIL AND GAS INDUSTRY 8/1/2011 Abstract Within the oil and gas industry, stakeholders associated with a given organization require a secure information modeling platform for asset lifecycle information management. The platform should be delivered via a suite of interoperable applications and services designed to improve the management, operational performance, efficiency, safety, and compliance of oil and gas-based infrastructure assets, while readily handling any number of variables created by handover and change.

2 TABLE OF CONTENTS Executive Summary 3 Introduction 3 Compliance and Conformance 4 ISO Environmental Considerations 5 Impact on Public Safety 5 Managing Change through a Customizable ALIM Platform 6 Interoperability 7 The Petroleum Value Chain 7 Handover and Transition Management 8 Continuous Handover and ALIM 9 Conclusion 10 About Bentley 11 About PennEnergy 11 This research was conducted by PennEnergy.com through a partnership with Bentley. The research and its interpretation have been carried out in good faith. The whitepaper is based on the information received by PennEnergy. PennEnergy makes no warranty, express or implied, as to results obtained by any person or entity from the use of this information or any data included herein. Please refer to PennEnergy in case of questions on this whitepaper. 2

3 EXECUTIVE SUMMARY Assets commonly utilized within the oil and gas industry are unique in many ways. Asset lifecycle information management within this industry must emphasize strict regulatory compliance and conformance. This is especially the case with regard to the environment and the welfare of the general public, through all stages of a managed asset s lifecycle, by meeting or exceeding industry information standards such as ISO The information modeling platform that guides a company s asset lifecycle information management must be fully configurable with regard to scale and maintenance. It must be able to be implemented at any and all points in the lifecycle of a given asset, embracing the challenges of interoperability within the massive scope of the petroleum value chain. Oil and gas asset lifecycle information applications must ensure the efficient, seamless, continuous handover of asset lifecycle information, both inter- and intra-organizationally, even in the midst of change, while simultaneously maintaining the integrity of all data involved. INTRODUCTION Oil and gas infrastructure assets are unique in scale and scope. Their utility varies not only from organization to organization, but also within an organization itself. Moreover, they may evolve, sometimes significantly, over their lifetime. These considerations present unique challenges to infrastructure asset information management. Questions arise such as: In positioning drilling assets, how should our organization cope with a regulatory landscape that varies, sometimes drastically, on a national, state, and even local level? How do we create and maintain an offshore platform today that will change as our business needs change, perhaps even 30 years from now? How do we avoid liability for infrastructure-level assets we once owned but have since sold or leased to other entities? These considerations reveal that reliable asset lifecycle information management (ALIM) within the oil and gas industry is as complex as it is essential. Organizations within the oil and gas industry provide their ALIM teams with tremendous amounts of information, including reference data about every asset s functional capabilities, the physical design and intended purpose of each asset, and the safe, efficient operation and maintenance of the equipment. This data also includes status information about projects and assets that can enable people to control performance, and historical records that can help them determine the root cause of problems and incidents. Being key inputs to operations decision support, the information must be technically as well as functionally accurate. It must also be actionable and compliant. 3

4 Ultimately, an ALIM platform must ensure operational performance, asset availability for production, safety, compliance, and governance of infrastructure assets while increasing the return on investment for owner-operators. One challenge faced by an organization s ALIM team is that of maintaining the consistency and integrity of asset information in the midst of the perpetually changing petroleum industry. Political landscapes churn, and regulations stipulating corporate behavior and business planning adjust accordingly. In response, a sound ALIM strategy should govern all information transfers in terms of establishing proper guidelines for the handling of information to be exchanged, its content and form, the timing of all exchanges, the roles and responsibilities of the various parties, and adherence to policies and regulations associated with the oil and gas industry. Specifically, a strong asset information model will manage design and performance requirements, organizations, project teams, locations, materials, physical assets, and projects. The model will also monitor relationships between these, and will analyze, manage, track, propagate, and communicate change. This whitepaper will demonstrate that, beyond mere asset management, ALIM teams within the oil and gas industry require a robust modeling platform to fully and effectively manage asset information. This customizable platform should be delivered via a suite of interoperable applications and services designed to improve the management and operational performance, safety, and compliance of oil and gas-based infrastructure assets, while readily handling any number of variables created by handover and change. COMPLIANCE AND CONFORMANCE Whether it pertains to excavation equipment, diesel engines, or subsea robotics, asset information management within the oil and gas industry must emphasize compliance and conformance through all stages of a managed asset s lifecycle. These days, compliance with industry information management standards is more a question of how than why. In addition to infrastructure and equipment, the physical environment that is actively and potentially impacted by a company s assets should be of primary consideration in the implementation of a compliant information model. Even more important are considerations of public safety. Regulatory organizations around the world monitor the oil and gas sector. From U.S. state oil and gas commissions to federal governmental bodies like the U.S. Department of Energy, the U.S. Department of the Interior, the Federal Energy Regulatory Commission (FERC), and the Council of European Energy Regulators (CEER), these organizations all have varying degrees of infrastructure information oversight within their realm of influence. With regard to international standards, the oil and gas industry s leading standard for asset modeling information is ISO

5 ISO Over time, the need for a simple, compliant model for ALIM has become apparent. ISO 15926, under development since 1992, is a seven-part standard that provides users the ability to build common data models for the purpose of information management. This ability is essential for organizations that are responsible for managing asset information of the scale and scope common to the oil and gas industry. The purpose of ISO is to facilitate integration of data to support the lifecycle activities and processes of production facilities. ACCORDING TO THE INTRODUCTION OF ISO 15926: INFORMATION CONCERNING ENGINEERING, CONSTRUCTION AND OPERATION OF OIL AND GAS ASSETS AND INFRASTRUCTURE IS CREATED, USED AND MODIFIED BY MANY DIFFERENT ORGANIZATIONS THROUGHOUT A FACILITY'S LIFETIME. THE PURPOSE OF ISO IS TO FACILITATE INTEGRATION OF DATA TO SUPPORT THE LIFECYCLE ACTIVITIES AND PROCESSES OF PRODUCTION FACILITIES. The standard articulates that functional requirements, physical solutions, reference data, and implementation methods for the integration of distributed systems, and their integration into an organization s ALIM platform (specifically within the oil and gas industry) should be, under no uncertain terms, compliant. ENVIRONMENTAL CONSIDERATIONS In practical application, ISO serves to facilitate measures carried out by conscientious oil and gas entities measures that are designed to protect the environment from unintended damage caused by infrastructure assets. These measures are often documented explicitly or are otherwise implicitly recorded as a result of a company s robust ALIM platform. In this respect, it may be concluded that a comprehensive ALIM platform can translate directly into a healthy bottom line, in that it protects an organization from potential liability and implements regulatory compliance in business processes. Environmental catastrophes such as oil leaks and spills, petrochemical mishaps, and excessive pollution are expensive. It is in an organization s best interests, both with regard to public perception and financial health, to carefully manage asset information. Proper asset information modeling guides organizations in the inspection of infrastructure assets, helping them to identify potential asset wear, malfunction, damage, and failure to better avoid environmental destruction or catastrophe. IMPACT ON PUBLIC SAFETY While the environmental impact of oil and gas assets is of significant concern to owneroperators, of even greater concern is the impact of these assets on public safety. The long-term effects of slowly wearing assets, as well as the immediate effects of asset failure or malfunction, can immeasurably and irreparably impact the health and wellbeing of the general public. On a local corporate level, those involved with the operation 5

6 and maintenance of mismanaged assets are at significant risk. As an industry based on serving the public, it would be expected that asset information teams ensure public safety as part of their fundamental corporate governance through the vigilant implementation of a secure ALIM platform. MANAGING CHANGE THROUGH A CUSTOMIZABLE ALIM PLATFORM Oil and gas infrastructure assets are unique in that: Their scale is often measured in hundreds of acres. Their complexity is represented by entire networks. Their life-expectancy is measured in decades, not years. Asset updates involve significant engineering and design. They must maintain continuous, efficient operation for the broadest possible constituency. In addition, asset management processes are rarely sequential, independent, finite processes, but are often interdependent and overlapping, requiring information-sharing and collaboration throughout the lifecycle of the asset itself. Therefore, the information modeling platform that guides a company s ALIM should be fully configurable with regard to its scope and implementation. Beyond focusing exclusively on the operations side of asset management, management platforms should also address configuration management, engineering collaboration, the tracking of asset information as it is being developed, and emerging trends. To add to the complexity of asset management within the oil and gas industry, many of the applications and systems widely used by owner-operators utilize proprietary data structures. The use of proprietary systems makes the communication of information within large organizations difficult in that the applications must span different business units, projects, or geographical regions as part of an extended enterprise (including internal and external stakeholders). Even when organizations have standardized on a single vendor, different applications are not always readily accessible for consistent information sharing. Clearly, infrastructure asset information modeling in the oil and gas industry must go well beyond merely managing documents. A truly sound ALIM platform: relates structured and unstructured information to teams, the organization, and the enterprise; focuses on how the information is related to the enterprise; records conditions, incidents, events, and corrective actions; captures, tracks, facilitates, and transmits changes; tracks and manages all site permitting requirements; creates auditable sequences of how and why information changed. 6

7 As represented in the following graphic, asset information exists in a variety of formats, both paper and electronic, virtual and formal. Corporations must disseminate asset information across various silos and disparate functional groups. In light of this, asset information must remain actionable and readily available to a number of different types of users, from engineers, operators, and workers in the field to management and executives. Naturally, the information must be sound, accurate, complete, fit for purpose, and trustworthy. However, it also must possess a strong functional quality, enabling users engaged in a variety of capacities to manage, find, and share CAD, geospatial, and other project-related AEC content. Being able to configure and adapt an ALIM platform to an organization s business standards is crucial. An ALIM platform must be sufficiently configurable to model a client s information standards and business practices so that it is truly useful. However, a robust ALIM platform must provide flexibility throughout the lifecycle of the operating assets. INTEROPERABILITY Interoperability of oil and gas assets is commonly understood to refer to the ability of different types of computers, networks, operating systems, and applications to work together effectively, without prior communication, in order to exchange information in a useful and meaningful manner. Interoperability becomes a challenge in oil and gas ALIM in part because of the magnitude of the petroleum value chain. It should be understood that an ALIM system will not necessarily replace the business systems 7

8 currently in place, but will enable these disparate systems to interrelate with the enterprise in a more efficient, intelligent manner. THE P ET RO LEUM VALUE CHAIN The petroleum value chain comprises four major segments: Upstream field production (a.k.a., exploration and production) Midstream transport, trading, and storage Gas and deregulated power Downstream refining, manufacture, petrochemical processing, and retail marketing and sales As shown in the following graphic, each segment is further divided into sets of processes associated with particular phases in the segment. This diagram reveals the layered interworking of the petroleum industry and, thereby, suggests the complexity of interoperability within the industry. The footprint of individual assets native to each segment shown in the diagram above potentially spans decades, acres, multiple networks, multiple regulatory organizations, and multiple corporations, at a minimum. In light of this, there is a clear need for a scalable, platformbased, dynamic asset information management strategy that is designed to empower owner-operators to leverage the value of information modeling throughout design, construction, operations and maintenance, while maintaining the transactional integrity that their enterprise applications demand. Therefore, Implementing an interoperable system that supports reuse will result in a quantifiable return on assets/return on investment. 8

9 HANDOVER AND TRANSITION MANAGEMENT Over the course of its lifetime, a given oil and gas asset may pass through the hands of any number of organizations and owners. Even an asset that remains within the exclusive possession of a single organization for the duration of its use sees multiple operators and stakeholders. As assets such as offshore drilling platforms, refineries, and processing equipment are transferred and/or utilized by stakeholders (who are, at times, continents away from the asset and from other stakeholders), operation and maintenance records must remain absolutely accurate. Accuracy of information necessitates being able to properly model the information critical to the operation of the assets, as well as being able to ensure that a robust change management process is in place so that any changes to the asset go through an approval process as defined by a company s standards. Providing clear, consistent, and constant audit trails for each asset is a must when guaranteeing accurate information transfer. Finally, being able to model and control this information in a multi-tenant application that allows owner-operators to define their entire organization while modeling the difference between individual instances of the fleet helps to guarantee accuracy as well. CONTINUOUS HANDOVER AND ALIM Handover of oil and gas asset information is far from a single operation. It occurs repeatedly, dynamically, and sometimes, spontaneously. Beyond simple document transfer, oil and gas enterprises should implement continuous handover of oil and gas asset information. As the name suggests, continuous handover involves ad hoc creation of, access to, and dissemination of asset-related information that is readily accessible to the right people within a controlled environment. As shown in the graphic below, continuous handover involves a combination of common information models that unite in a comprehensive ALIM platform as part of a status managed workflow across all asset stakeholders. 9

10 Each model contributing to the ALIM platform serves a distinct and unique purpose and answers specific questions in the assessment process. Project Information Management (PIM) Controls requirements and deliverables. Provides formal document control and transmittal of contractual project information. Captures the engineering design information in the context of the full asset information model. o What is needed in order to execute a successful retrofit? o Where will this information come from and how will it be implemented? Asset & Project Portfolio Information Management (APPIM) Suggests continuous improvement, updating, and revisions. Provides information as to the latest as operated conditions for asset assessment purposes. Provides original design requirements for asset assessment purposes. o Improvement of which portion of this pipeline will result in the greatest return, based on the pipeline s original design? o What associated equipment will need to be upgraded? Asset Information Management (AIM) Captures operational and business process information. Supports business processes associated with operating an infrastructure asset. Collects and manages records and workforce knowledge. o What regulatory roadblocks have been previously experienced in performing a new seismic survey? o How might they arise again? o How might these roadblocks be mitigated? Asset Lifecycle Information Management (ALIM) Makes asset information garnered from PIM, AIM, and APPIM available. Controls access of asset information. Ensures the accuracy and consistency of asset information. Provides context. Spans the lifetime of the asset. ALIM effectively encompasses multiple infrastructure asset models, enabling owner/operators to make informed decisions within a framework that is specific to the asset, but also broad enough to address inputs that are both directly and indirectly related. ALIM outputs are readily available to the appropriate stakeholders regardless of where said stakeholders enter into the process. Handover among stakeholders is 10

11 continuous, efficient, and accurate. A nimble ALIM platform will not force stakeholders to invest unnecessarily in exhaustive modeling packages, but will instead allow stakeholders to invest only in relevant packages as the stakeholder sees fit. CONCLUSION Asset information related to oil and gas infrastructure must be accurate, trustworthy, and accessible, manifesting itself in a comprehensive asset lifecycle information management platform. This platform must comply with and conform to regulatory absolutes, acknowledging the potential for significant impact both on the environment and on living creatures. The platform must be scalable and configurable, depending on the needs, entry and exit points, and objectives of the stakeholders involved. Finally, it must support continuous handover, encompassing traditional asset information models to produce holistic, contextual, reliable outputs. ABO UT BENT LEY SYST EMS, IN CO RPORAT ED Bentley is the global leader dedicated to providing architects, engineers, geospatial professionals, constructors, and owner-operators with comprehensive software solutions for sustaining infrastructure. Founded in 1984, Bentley has grown to nearly 3,000 colleagues in more than 45 countries and $500 million in annual revenues. Since 2001, the company has invested more than $1 billion in research, development, and acquisitions. ABO UT P EN NENER GY PennEnergy serves global energy professionals with the broadest, most complete coverage of industry-related information, with resources to help effectively perform critical job functions. Including content from all PennWell Petroleum brands and other industry sources, PennEnergy.com delivers original industry news, financial market data, in-depth research, maps, surveys, statistical data, and equipment/service information. We have also invested in Google search technology to make it easy for customers to search and find needed data. Since 1910, The PennWell Petroleum Group has been the industry leader for coverage of and service to the worldwide petroleum industry. Its foundation magazines are Oil & Gas Journal, Offshore Magazine, Oil, Gas & Petrochem Equipment, Oil & Gas Financial Journal, LNG Observer and The Petroleum Buyers' Guide. The group also produces targeted e-newsletters, hosts global conferences and exhibitions, seminars and forums, directories and technical books, print and electronic databases, surveys and maps. 11