Continuity Planning in the Oil and Gas Industry

The cost of downtime can go into millions of dollars, observed Philippe Carle of Schneider Electric. For the leading oil and gas companies around the world, this means properly insulating themselves from business interruptions and leveraging effective risk management to gain a competitive advantage.

As with the case in other industries, the cost of downtime in the oil and gas sector can be broken down into direct or indirect expenditures. The latter can include lost opportunities and the added time required to bring idling or stopped machinery up to speed. Moreover, additional expenses can also add up quickly from the loss of reputation, or even potential fines stemming from safety lapses.

Man wearing blue hardhat using tablet at Natural gas processing facility

Assessments to Consider

Successful risk management can only happen with a comprehensive business continuity plan. This is a multi-faceted strategy established after a thorough risk assessment. We look at some of the key assessments for a robust business continuity plan.

  • Hazards assessment: Defines hazard-prone areas that span both upstream and downstream operations. Depending on the location within Southeast Asia, this might include hurricanes, earthquakes, floods, as well as events that can impact safe operations such as the haze. The likelihood of such events as well as the potential magnitude should both be considered as part of the hazard assessment.
  • Vulnerability assessment: A vulnerability assessment looks at disasters through the lens of how susceptible a deployment is to damage. This might include considerations such as the value of the property, the critical systems that might be exposed, and the dangers of secondary hazards stemming from the initial disaster.
  • Power assessment: Takes a deeper look at the adequacy of power systems ranging from the available back-up power, surge suppression capacity and the reliability of the power source. The latter will have to include routing diversity for robustness and the reliability of control systems – the latter is vital for the ability to activate mitigation systems and prevent cascading failures.
  • Risk assessment: Evaluate the likelihood of a hazard event in tandem with its probable degree of damage. Using a burst pipeline as an example, this would include the effects of secondary issues such as the missing of delivery schedules and the environmental impact. It is worth noting that a loss of power (and hence control) can often result in explosions with a strong likelihood of fires, culminating in a substantially increased risk profile.

The above list is but a short list that must be considered for continuity planning. Other crucial aspects that must be considered would probably include a disaster recovery assessment, fire safety assessment, security and alarm assessment, as well as environmental assessment.

Power station

Rehearsing the Plan

Ultimately, an assessment is the very first step when it comes to adopting a comprehensive business continuity plan. This must then be fleshed out with other vital steps that span the technological, economical and even political spectrums and integrated as part of a cohesive masterplan.

Finally, this plan must be subjected to rigorous tests based on realistic parameters. To ensure that employees are well-versed on contingency plans, they must be tasked to execute a recovery operation under varying conditions. Deficiencies exposed during these drills should be documented and tweaked to enhance the plan.

In the meantime, you can check out the complete range of solutions by Schneider Electric for the Oil and Gas industry here.

Article by Bhagwati Prasad, Vice President, Business Development, Secure Power Division, Schneider Electric