PETRONAS Upstream Improves Operational Performance Through Digital Transformation and Collaboration  

Summary

Modern process plants across industries, such as oil & gas, chemicals, metals & mining, and power generation, are all highly automated. A variety of technologies, including distributed control systems (DCS), advanced process control (APC), safety instrumented systems (SIS), and emergency shutdown systems (ESD), help ensure reliable, safe, and economic process operations. Indeed, the typical plant invests millions of dollars in acquiring and maintaining such systems over a lifespan that can run into two or three decades.

However, plant owners cannot take a fit-and-forget approach to their process automation systems. Rather, these need to be managed astutely and supplemented appropriately to ensure that stable, safe, and economic process operations are not compromised, whether operation staffs are located on site or monitoring and managing a site from a re-mote location.

Issues and problems that can arise include: an excessive and unnecessarily high number of process alarms that control room operators can-not address adequately; poor visibility into the extent of SIS bypass activations that can make a facility potentially vulnerable to process safety incidents as a result of disabled safety instrumented functions; and inefficient and incorrect running of control loops, which can have multiple negative impacts, including economic loss from poor quality product and increased operator interventions and workload.    

Against this backdrop, ARC Advisory Group met with executives from PETRONAS, the national oil & gas company of Malaysia, to discuss its strategic initiative for Operational Excellence, Digitalization, and Remote Operations – codenamed PRIME Solutions.  This initiative leverages the implementation of PAS PlantState Integrity (formerly PlantState Suite) across multiple sites in  upstream oil and gas production operations. While the implementation is an ongoing multi-year endeavor, the results from the first installations in Malaysia point to significant gains in operational performance, increased ability to monitor and drive operations remotely, and the achievement of specific objectives related to improved process safety, reliability, and cost-effective process operations.    

PETRONAS Upstream Business

Along with Downstream and Gas & New Energy, Upstream is one of the three major operating divisions of PETRONAS (Petroliam Nasional Berhad). Onshore and offshore exploration and production of oil and gas takes place not only in its home territory but across more than 20 other countries around the world.  These include Angola, Argentina, Australia, Canada, Gambia, Indonesia, Iraq, Myanmar, and Turkmenistan.

In the 2019 financial year (ending December 31), the Upstream business reported revenues of RM102.6 billion ($23.6 billion) and profit after tax of RM22.2 billion. Other pertinent data for the segment: 233 producing fields, 419 offshore platforms, 29 floating facilities, and more than 12,000 staff.

As with all oil & gas companies hit hard by the oil price crash in the middle of the last decade, PETRONAS was forced to evaluate and retool its business strategies for an era in which consistent and easy profits could no longer be guaranteed by $100+ prices for a barrel of oil, and in which regulators and society would pay much greater attention to activity and performance in the area of health, safety, and environment (HSE).  

In the 2016 Annual Report, PETRONAS Upstream emphasized its focus on reducing costs and delivering projects with discipline, but also, and significantly, on the need to prioritize safety and asset integrity. The latter aspects were reiterated again in the 2017 review when Upstream’s Executive Vice President and CEO stressed the need to “continue to focus on value-driven growth and improve our operational excellence to ensure safety, reliability and sustainability of the business.”

The PRIME Initiative

The more demanding external environment and renewed corporate focus on Operational Excellence, Remote Monitoring, and Digitalization led to the development of the PRIME initiative at PETRONAS Upstream. An acronym for Predictive Revitalization of Instrument to Maximize Efficiency, PRIME focuses on three aspects of plant operations at Upstream’s onshore and offshore installations: Safety − improving process safety performance; Reliability – improving process control performance; and Cost Efficiency –  improving risk management performance.

These three together also help satisfy the objective of developing a Collaborative New Way of Working, something important and valuable for Upstream given the geographically dispersed and often remote nature of its operations. With different sites having different operating practices, the PRIME program provides an opportunity to standardize efficient and effective processes across all Upstream facilities.

Responsibility for the development and realization of the PRIME program is with the Operational Excellence (OE) department within the Center of Excellence (CoE) - located at PETRONAS’ headquarters in Kuala Lumpur. The CoE provides the necessary strategic, operational and technical support by remotely monitoring and engaging with onsite/offsite staff at the various Upstream production sites.

The initiative was conceptualized, developed, and refined during 2016.  Multiple engagement and communication sessions on PRIME plans and objectives to various stakeholders followed.  These stakeholders included senior executives and Upstream facilities’ personnel to promote awareness and buy-in and secure budget allocation.  The RFP, tender bid evaluation and selection process took place over a lengthy 10 months  in 2017.

Technological and commercial assessment ranked suppliers that could satisfy the PRIME objectives of improving the safety, reliability, and cost effectiveness of Upstream plant operations, including the provision of remote monitoring with comprehensive dashboards. With an eye toward expediting the implementation timeline by eliminating the need to deploy multiple point solutions and avoid potential data integration issues, PAS’ single-suite approach was a major plus point in the eventual selection of PlantState Integrity.

Introducing Integrity

PlantState Integrity is a modular product that offers a suite of solutions designed to help ensure safe, reliable, and cost-effective industrial operations. These solutions address problems commonly faced in process facilities such as alarms generated at such a frequency that they cannot be handled effectively by operators; inadequate control and management of safety function bypasses; an unnecessarily high number of control loops in manual mode or in saturation; and setting operating and safety limits outside designed boundaries.  

The first phase of the project, designated PRIME 1.0, involves deployment across a planned 37 Upstream sites. For this phase, PETRONAS is implementing four PlantState Integrity modules that functionally address alarm management, safety lifecycle management, control loop performance, and operating boundary management.  

 

Alarm Management

ARC’s latest market research study on alarm management, published in 2019,  notes the generally poor state of alarm management in process plants. The primary contributor is the sheer number of alarms generated per shift, which prevents control room operators from making timely and effective intervention. The main cause of all those alarms is the negligible cost of implementing alarm points with a modern DCS, which means no disincentive for designers to add in yet another alarm to the P&ID configuration.   

It is thus important for plants to have an alarm management strategy in place so operators and CoE personnel have the right information to quickly recognize and respond to abnormal situations. This can only be accomplished if they are not distracted by spurious alarms that reduce situational awareness.

To aid end users in this regard, the ISA 18.2 (IEC 62682) industry standard provides a framework for implementing an effective and sustainable alarm management strategy in process plants. It prescribes a lifecycle-based approach to alarm management in which alarms are set up, rationalized in a consistent way, and reviewed for effectiveness.

Alarm management software such as that available through PlantState Integrity, can help facilitate implementing ISA 18.2-compliant best practices in the plant.  This solution caters to key ISA 18.2 aspects, including developing and documenting the alarm philosophy; rationalizing alarms; and alarm monitoring, analysis, and auditing.  ARC recommends that end users adopt alarm management software that conform to the ISA 18.2 standard.

Another key ARC recommendation for end users like PETRONAS is that independent (i.e., non-DCS supplier) alarm management software should tightly integrate to a variety of DCS systems.  Given the heterogeneous nature of DCS installations across PETRONAS Upstream, this capability of PlantState Integrity to support multi-vendor DCS environments was another important consideration in its selection as the alarm dashboard (PRIME-ADB) in the PRIME project.   

Safety Lifecycle Management

To ensure process safety and prevent the type of mass casualties that can potentially occur, notably in the hydrocarbon-based industries, owner-operators commonly implement a safety instrumented system (SIS). However, to be effective, the SIS must be managed properly throughout its lifecycle, i.e., from initial concept and requirements definition through to in-plant operation, maintenance, modification, and finally, decommissioning.

A particularly challenging aspect of the safety lifecycle is operations and maintenance.  SIS design information and safety procedures are often kept in disparate spreadsheets and documents, such that actual operation of the safety system can evolve away from the design intention without this becoming apparent.

There is also often inadequate analysis and hence understanding of SIF (safety instrumented function) activations and SIF bypass activations.  While its often necessary to bypass an SIF during plant upset, startup, SIS testing, and other non-steady-state events; poor record-keeping of these actions can mean safety functions are disabled for much longer than intended, potentially compromising safety.

ARC is seeing increasing adoption of software technology that can help industrial end users better manage the safety lifecycle.  ARC forecasts a significant growth in revenues for lifecycle management software over the next five years, as more companies acknowledge the importance of meeting regulatory requirements and adhering to industry standards and best practices.

Implemented as PRIME-IPM in the PRIME project, PlantState Integrity’s  safety lifecycle management module (IPL Assurance) is helping PETRONAS Upstream ensure effective SIS function management at its installations with onsite and remote monitoring.  This reduces the risk of a serious process safety incident. A particularly notable result is the ability to track when safety systems are bypassed, by whom, and for how long they have been bypassed.  Previously at PETRONAS, bypassed safety systems were not tracked effectively, leading to increased risk. With the PRIME-IPM solution in place, this is no longer the case.

Control Loop Performance Management

Safe, reliable, and cost-effective industrial operations are highly dependent on the proper functioning of the thousands of control loops running in the typical process facility.  Poor control loop performance can result from issues such as mechanical wear of control valves, compressor fouling, and neglecting to retune for process changes. The consequences can include an inordinately high number of loops placed in manual control, unnecessary alarm generation, and negative impacts on production output and quality.

PlantState Integrity (PRIME-CLP in the PRIME Project)  provides onsite and remote management of control loop performance by continuously monitoring, analyzing, and diagnosing the functioning of control loops.  Particularly useful for operators is its ability to prioritize loop performance issues and identify possible contributing issues with controllers, valves, or sensors and recommend corrective actions. With PRIME-CLP, control loop performance is systematically analyzed, tracked, and managed, resulting in better process control in general.

Operating Boundary Management

In process plant operations, it is important that process boundaries are specified, documented adequately, and monitored for any  excursions.  These boundaries include limits for operating zones, i.e., optimal, acceptable, alarmed for safety system trips, and for equipment mechanical operation.  This information is often kept in different databases and locations, which can make it hard to access and control.

Boundary management software enables plants to have a single repository for boundary limit data along with logical visualization and also get alerted automatically to deviations from designated boundary limits. With PlantState Integrity, both onsite operation teams and CoE personnel at PETRONAS Upstream can visualize all the critical operating parameters and safe operating limits on a process safety dashboard with reports on violations.  For example, detecting a pump low-pressure alarm set to a value lower than the pump trip, can help avoid a costly process shutdown.

Realizing PRIME Value

While the PRIME project and implementation of PlantState Integrity is still ongoing as of mid-2020, PETRONAS is already seeing positive results and value creation from its investment in the software solution.  For example, at one plant, the new alarm management capability has led to an almost 90 percent reduction in alarm rates, with average alarms per hour per operator falling from 44.5 to 5.6. As well as a clear operator efficiency gain, PETRONAS executives appreciate that an effective alarm management system translates to a real reduction in process safety risk, as critical situations are far more likely to get priority for any necessary remedial action.

Also contributing to improved process safety is the marked reduction of unnecessary safety instrumented function (SIF) bypasses, which fell from 101 to just seven at one offshore platform after the implementation.  PRIME-IPM also facilitates the Bypass Governance Model, which PETRONAS Upstream has introduced to provide a procedural rather than the previously somewhat ad hoc approach to activating, monitoring, and deactivating safety bypasses. 

Meanwhile, with control loop performance management, PETRONAS Upstream is getting highly useful dashboard visibility into control loop elements such as the status of control valves out in the field.  For example, the PRIME solution identifies valves that are cycling too frequently, sticking, and/or oversized for the process. All this information was previously unavailable without running time-consuming control valve tests.

Remote operations visualization is a powerful and, indeed, striking aspect of PRIME.  On large display dashboards at the Center of Excellence office PDCC (Petronas Digital Collaboration Center) area at PETRONAS HQ, hundreds of miles away from the terminals and platforms, staff gain insight into what is happening (across the four PRIME Solutions) at all those facilities in real time.  While each facility also has a PRIME dashboard for insights on its own performance data, analysts at PDCC/HQ prepare weekly reports.  These are made available to the facilities for discussion and improvement actions.   

Initially, and perhaps not surprisingly, there was concern from individual plants on exposing their operations in this way.  In one instance, a plant manager was surprised to be informed by the Operational Excellence team at HQ of an inordinately large number of safety bypasses activated at his facility. But he took it positively and worked together with the HQ team to bring this down to help reduce safety risk at the facility.  Having all round visibility on the activities and performance at multiple and often very remote sites allows PETRONAS Upstream to work towards its goal of instilling common best practices and improving collaboration.   

Conclusions

The current turbulence in oil prices along with the economic fallout from the COVID-19 pandemic increases the imperative for oil & gas and other heavy process industry companies to relentlessly seek improvement opportunities that ultimately translate positively to the business bottom line.

Taking a methodical and structured approach with its Operational Excellence, Digitalization, and Remote Operations PRIME project, PETRONAS Upstream is reaping significant gains across process safety, reliability, and cost efficiency to help meet broader corporate objectives for business profitability and sustainability.

The increasing sophistication and ease-of-use of digital tools such as PlantState Integrity adopted by PETRONAS as the technological enabler for the ambitious PRIME project, facilitate opportunities for companies to make such improvements.  

As well as driving marked improvements in alarm management and control loop performance, the analytical and visualization capabilities of PlantState Integrity (PRIME Solutions at PETRONAS) increase awareness and understanding of operations, enhance collaboration, and facilitate the deployment of common best practices across multiple sites. 

In PRIME 2.0, PETRONAS Upstream is also planning to deploy additional capabilities with PAS Cyber Integrity. The objective is to boost protection against industrial cybersecurity threats and further improve operating integrity and performance of its oil and gas production facilities.

PlantState Integrity is a trademark of PAS, Inc.

 

ARC Advisory Group clients can view the complete report at ARC Client Portal

If you would like to speak with the author, please Contact Us.