Recent events have caused the industry to take a fresh look at the cost/benefit of an array of standard practices, including rig inspections. Two distinct approaches are commonly considered when seeking to improve the cost/benefit of rig inspections:
- Reducing the cost of inspection inputs – This approach employs two tactics: i) squeezing the supply chain to reduce costs and ii) minimizing POB and travel expenses through remote inspection procedures.
- Increasing the value of the inspection outcomes – This is primarily achieved by improving the inspection process so that the results provide greater certainty about overall condition and capability, and more importantly, that operational performance and safety will be met for the duration of the contract.
Choosing to focus on reducing input costs can have more immediate impact, but much greater value is realized through improvements to the inspection process. Improved operational results from a well-designed inspection program combined with preventative measures and ongoing compliance monitoring dwarfs the cost of the assurance activity itself. These results include increased certainty about ongoing operational performance, i.e., fewer surprises resulting in schedule delays and cost overruns. Realizing these benefits can transform discrete, unrelated inspection activities from a cost of doing business into an investment in a cohesive performance assurance program with a lower total cost of ownership.
In general, inspections can be designed and executed to provide one of two outcomes – situational awareness or operational integrity.
- A “situational awareness” outcome provides an evaluation of the capability of a rig with respect to what is known at that moment. A significant downside to this outcome is that it provides only a limited ability to anticipate performance beyond the very near-term future.
- An “operational integrity” outcome incorporates situational awareness, but also provides an evaluation of a rig’s ability to operate in a manner that ensures continued effective and efficient performance. The outcome is predictive and provides better certainty as to performance during the rig’s operational term.
If the goal is to achieve better predictability and certainty of operational performance, then it is necessary to design and execute the inspection program for an operational integrity outcome.
As is the case with most processes, a better outcome is a direct result of better preparation. An inspection program focused on operational integrity outcomes extends beyond executing your grandfather’s checklist-based condition survey. For rig inspection, that means all stakeholders (operator, contractor, and inspection third party) cooperate in defining specific key performance indicator (KPI) goals and establishing confidence in the systems that measure and track performance before designing and executing the inspections.
An operational integrity outcome inspection program has three critical phases:
Phase 1 – Definition and validation of Performance and KPIs
First and foremost, we define “performance” in terms of the specific KPIs that would be measured and tracked. Examples would include operational uptime, equipment availability, maintenance backlog, or NPT. Athens Group Services has been a longtime proponent of the importance of getting the KPIs right. You can read more on the topic in our June 2016 newsletter “Getting the KPIs Right: The Critical First Step in Asset Acceptance”
Next we look at the tracking/measuring capabilities on the asset to ensure that we can actually measure and trust the KPI reporting. One key characteristic of a KPI measurement validation is statistical stability. A measurement that is not statistically stable indicates that either the process itself is unstable, or that the measurement cannot be trusted. For a physical parameter such as pressure, time, or volume, the measurement is considered stable if it produces a normal distribution over time.
Process performance KPIs such as NPT must also be established as statistically stable. One of the most common issues in performance measurement are instabilities in NPT measurement. For process performance KPIs we establish stability by ensuring the activities executed during the process are defined, observed, and recorded in a consistent and repeatable method.
Phase 2 – Design and execution of a KPI specific inspection program
Following the definition and validation of performance and the KPIs that will be used to track it, a specific inspection plan can be designed. This plan starts with the basic equipment condition and function survey. The plan is then extended to include audit elements which establish the baseline metrics and stability of the KPIs that will be used during operations.
This plan is then executed, and a report is prepared detailing the current condition and function of the rig (situational awareness), the historical baseline and stability of the KPIs, and the analysis necessary to evaluate the ability of the rig to continue to deliver the performance levels required (operational integrity).
Phase 3 – Ongoing audit and performance feedback
Once operations begin, a streamlined ongoing KPI audit program is put in place to validate the results of the inspections and ensure the rig performance is meeting the operational performance requirements as proven by the KPI results.
If desired, this ongoing validation of performance can be used as a feedback loop to identify performance improvement opportunities. An additional benefit is the validation of the inspection plan. This validation can be used to improve the efficiency, effectiveness, and outcomes of the next inspection plan.
The Athens Group Services operational integrity approach to rig inspection implements this three-phase approach, starting with the alignment of requirements and KPIs (as described above) and then follows a natural integrated system-oriented flow. The result is a rig selection and acceptance process that delivers consistent, repeatable, and statistically sound outcomes — providing confidence that the rig can execute your drilling program.
As you consider new approaches to address the cost/benefit of your rig inspections, be sure you are working with an inspection company with the experience and approach necessary to meet this challenge. Athens Group Services has the test and acceptance engineering experience to design and execute inspection and acceptance plans for an operational integrity outcome. If you would like further information on any of the concepts covered in this newsletter, please contact us. We will be more than happy to have a dialogue.
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