For the oil and gas industry, a dual set of realities requires a departure from the old way of doing things. As the industry grapples with the challenge of bridging the established yet unsustainable fossil fuel market with the shift to clean energy sources, one approach that’s proving invaluable is Asset Performance Management (APM).
APM optimizes the role of physical assets in meeting long-term corporate objectives by analyzing data from company-wide sources and identifying the most efficient and effective repair or replace strategies. This approach is particularly relevant in the oil and gas industry right now to help improve performance, reduce costs, and manage the delicate transition toward a more sustainable future.
The Role of APM in the Oil and Gas Industry
Today’s energy market bears witness to the undeniable growth of clean-power energy. As reported by the World Economic Forum, researchers expect a significant drop in fossil fuel generation, with 39% of global energy generated via renewable and nuclear sources in 2022 and an 80% increase in worldwide electricity demand met by wind and solar energy. Yet, many countries and industries remain reliant on oil and gas.
In this complex landscape, APM plays a crucial role:
- Maximized asset performance: APM allows oil and gas companies to maximize asset uptime, increase production efficiency, and extend the life of assets by continuously monitoring asset health and using predictive analytics.
- Risk and safety management: APM helps manage risk in inherently high-risk environments by predicting and mitigating potential equipment failures and ensuring compliance with safety regulations.
- Operational efficiency and cost reduction: APM can help optimize maintenance schedules, which leads to significant cost savings and improved operational efficiency.
The application of APM in the energy industry involves several key steps:
- Data collection: Gathering data points not only from the assets themselves, using sensors and IoT devices, but also from ERP, quality control, inventory, and other company-wide systems.
- Predictive analytics: Analyzing the data to determine patterns and trends. Advanced machine learning algorithms can predict potential failures before they occur, enabling timely maintenance.
- Real-time monitoring and control: APM systems offer real-time visibility into asset performance, allowing managers to make quick, informed decisions to optimize asset usage and reduce downtime.
IFS for Advanced APM
IFS offers a rich suite of features to optimize APM:
- Time series analysis: IFS captures data at regular intervals throughout a predefined duration, allowing for precise tracking of asset performance trends.
- Anomaly Detection: IFS’s machine learning algorithms can detect anomalies or deviations in asset performance, flagging potential issues before they escalate.
- Failure Prediction: The platform can predict potential equipment failures, providing insights into the rate of equipment degradation and the most economical time for repairs or replacements.
As an asset’s performance declines, the quality of its output also decreases, while energy use and other costs increase. Once the APM program determines an imminent asset failure, it suggests an action at the appropriate time: repair (creating a work order) or replace (creating a purchase order). The results of these actions, even if initially incorrect, are fed back into the AI, continually refining the accuracy of its predictions.
IFS EAM tracks and surfaces this information as asset-related metrics like mean time to repair (MTTR), asset longevity, cost, and measures that address health, safety, and the environment (HSE). It can also tie these things back to the assets’ contribution to the company from a production standpoint through both financial and non-financial metrics.
Thriving in the Future Business Reality of Oil and Gas
The oil and gas sector experienced historic profit levels in 2022, with Reuters reporting a doubling of profits for Big Oil at $219 billion. However, these gains are temporary as volatile prices within global energy markets will eventually level out and rising costs will lead to declining profits. Oil and gas companies will be expected to support the existing market even as it declines, while preparing for a new reality of clean and sustainable energy.
As the sector evolves, the role of APM will also continue to evolve. Digitalization and technologies such as AI, IoT, and machine learning are enhancing APM’s predictive capabilities to provide even greater operational insights. The result will be more accurate predictions, real-time data analysis, and automated asset optimization, helping oil and gas companies meet the expectations of not only the public, but also shareholders and regulators.
To learn more about the transformative power of APM in the oil and gas industry, download our white paper: