Failure to maintain property poses risks

The Regulator | Issue 4: 2020 

NOPSEMA has developed and is seeking feedback on new industry guidance. The guidance discusses ageing assets and life extension in the Australian regulatory context, and promotes the review of management systems used on offshore oil and gas facilities, with a focus on managing the risks associated with ageing.

Under relevant legislation, companies are required to have in place accepted risk management plans, which include safety cases, well operations plans, offshore project proposals and environment plans. Plans are assessed by NOPSEMA’s teams of technical and scientific experts against requirements set out in the Offshore Petroleum Greenhouse Gas Storage Act 2006 (OPGGS Act) and associated regulations.

To be accepted, a plan must clearly demonstrate how a duty holder will undertake a proposed activity to protect the health and safety of offshore workers and the integrity of wells while reducing environmental impacts. Once a risk management plan is accepted, NOPSEMA will monitor the compliance of offshore energy resource companies as part of ongoing regulation. 

The intent of the new guidance is to promote practices that ensure risks associated with ageing assets are managed to be as low as reasonably practicable. Informed by international research and experience, the guidance recognises that the age of a facility and equipment is less important than its condition and the effects of material deterioration and damage over the lifetime of a project. In other words, just because equipment is old, doesn’t mean it’s unsafe. It depends on how well it has been maintained throughout the life cycle.

When a new gas or oil field is developed, the anticipated production life is a factor in the design of the associated facilities and equipment, such as pipelines. Research reinforces that facilities must continue to be maintained throughout the entirety of their field life to avoid accelerated deterioration.

The requirements of the regulatory regime comprehensively cover the activities required to manage the effects of ageing. Duty holders are required to explain how they are maintaining property in good repair and condition and planning to execute the removal of property when no longer in use in environment plans. Operators with accepted safety cases should already have a framework in place for managing the challenges arising from ageing assets. 

Another important aspect of maintenance is consideration and management of changes to the operating environment over time. Duty holders are required to revise safety cases under certain circumstances and periodically over five years. This must include a description of the means by which the operator will ensure the ongoing integrity of the technical and other control measures identified by the formal safety assessment for the facility.

Over time the nature of potential major accident events and the magnitude of their consequences can change. The composition of product can vary as fields mature, with increased gas, water fraction or sulphide content, as well as the inventory and location of hydrocarbons stored. All these changes should be identified within the review of the safety case, and their impact on the adequacy of the safety critical elements assessed. For example, a fire protection system designed for oil may not be sufficient where there is a certain amount of gas.

As equipment ages, the actual performance of safety critical elements and the ability to achieve their performance standards, in relation to functionality, availability, reliability, survivability and interdependence can decline. There is potential for all aspects of performance to be affected. Functionality can be reduced, sometimes progressively or predictably, but also spontaneously or rapidly with little warning. Availability of safety critical elements tends to reduce as equipment ages due to a need for increased maintenance.

Spare parts may become more difficult to obtain and maintenance teams may lose familiarity with the equipment, with the result that the equipment may be awaiting repair or take longer to repair and therefore be in a failed state for longer periods.

Reliability tends to decline as ageing occurs, as safety critical elements will become more likely to fail to respond on demand, or fail during operation. Failures tend to occur more frequently as individual

components wear out at about the same time, and accelerate wear‐out elsewhere. Some systems can suffer longer term deterioration, thus becoming less resistant to the effects of a major accident event such as fire or explosion, and overload, therefore the survivability of safety critical elements could then be compromised.

There are also organisational effects that are more likely to impact ageing assets with the passage of time. Critical information required to properly understand equipment may have been lost through a combination of staff turnover, change of operator, or changes to information storage systems. The knowledge required to maintain equipment in a safe condition, or to identify the early signs of degradation may have been lost through retirement or staff turnover.

Once ageing damage becomes significant, rapid and widespread, existing approaches to managing safety critical elements may not be sufficient and a more proactive and integrated approach is required. Often, the new approach requires duty holders to evaluate the actual condition of the elements and establish what resources, including skills and knowledge are needed to rectify the problem. A framework of management processes can help organisations assess whether their response is appropriate to match the scale and dynamics of the ageing threat.

To reduce risks associated in later life, the new guidance reinforces that duty holders’ management systems should incorporate lifecycle management principles to asset ageing and life extension. Interested stakeholders are strongly encouraged to review the ageing assets and life extension guidance note and provide feedback via our by no later than Thursday 24 December, 2020 to be considered in its finalisation and subsequent use.