For Oil & Gas companies, sustainability entails a fundamental shift towards balancing environmental stewardship, social responsibility, and economic viability throughout their operations. Sustainable operations demand adopting and implementing practices that minimize carbon emissions, reduce environmental impact, and promote efficient resource utilization. The move towards sustainability also implies optimizing operations and better asset management, which leads to considerable cost savings.

According to IHS Market, crude oil production and initial processing generate 20-30% of the total carbon footprint in the cycle of production to combustion. In other words, the production and refining of oil generates almost one-third of carbon against combustion of the oil produced. This highlights the energy intensity of production and processing and the need for concentrated efforts to improve sustainability. 

This article explores how asset management helps Oil & Gas companies meet their multiple sustainability goals. For Oil & Gas companies, sustainability translates into various domains, from social perception to compliance. Before we explore how improving asset management improves sustainability, let us take a look at the multiple facets of the term:

GHG emissions and climate change: The sustainability of Oil & Gas companies is directly linked to their emission of greenhouse gases and their contribution to climate change. By committing to sustainable practices, these companies can mitigate environmental impacts and help safeguard ecosystems.

Regulatory compliance: Governments are implementing stricter emission control, waste disposal, and resource extraction compliances. Failure to comply with these regulations leads to costly fines and legal implications. 

Business advantage: Customers, investors, and even business collaborators increasingly prioritize sustainability while making decisions. Demonstrating a solid commitment to sustainability can result in a competitive edge and enable access to new opportunities and partnerships.

‍Long-term viability: The limited supply of fossil fuels makes sustainable extraction and production imperative for the long-term viability of the business. 

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Asset Management and Sustainability 

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Oil & Gas industry depends on Asset Management practices for enhanced safety, productivity, and efficiency. All three parameters mentioned above contribute directly or indirectly to sustainability. Here are a few ways in which asset management is directly linked to your sustainability goals: 

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Energy Consumption: Every piece of equipment, from a small pump to a large compressor, consumes a certain amount of energy. Here is a breakdown of the energy consumption of a typical centrifugal pump:

As seen, a pump consumes energy worth 17 times its purchase price over its lifetime. A typical Oil and gas facility may have several pumps and other energy-intensive equipment such as rotors, turbines, compressors, and boilers. Failing to maintain them properly will compound carbon emissions and long-term maintenance costs. Asset management facilitates proper work order generation and periodic maintenance to ensure that every piece of equipment is maintained at a stipulated frequency and consumes minimal energy. This not only optimizes equipment performance but also lowers costs and emissions associated with energy consumption. 

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Lifecycle Management: Lifecycle management ensures that an asset is operated at optimal efficiency and safety throughout its intended lifetime. It has multiple associated facets, all of which impact the operation's sustainability. 

• Using the asset for its full lifecycle: Asset Management plays a crucial role in ensuring that you use the asset for its entire life.‍
• Operating the asset at its full capacity: ‍If capital assets run at sub-optimal capacity, they will consume much more energy than their desired output. Asset Management ensures that you run the assets at their optimum capacity.‍
• Maintaining asset performance: Asset management involves crafting specialized strategies for maintaining assets and ensuring their sustainable operation. 

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Circular Economy: Many studies have shown that attaining a circular economy is the most effective way to achieve sustainability. Circular economy involves recycling, refurbishing, and repairing existing spares, resources, or equipment. Manufacturing even a small component like a flange begins with mining, smelting, and so on. Reusing a flange saves all these efforts and hence makes a substantial positive impact on the environment and reduces costs.

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Sustainable Use of  Resources: Managing and operating assets requires significant manpower. Implementing strong asset management strategies can lead to more sustainable use of teams in maintaining these assets. 

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Stock Accuracy and Sustainability: Poor stock accuracy means that the spare inventory you see in your ERP varies significantly from the actual stock in your warehouse. This will make you susceptible to a situation where equipment fails or is operating at a lower efficiency, and you do not have the required parts to fix it. Although this may seem unlikely, we have often seen this happen in many scenarios. Low stock accuracy delays the maintenance of equipment and hampers its sustainable operations in the present and future. Our asset management service involves thoroughly analyzing your inventory and warehouses. In the past, we have helped many leading Oil & Gas companies repurpose obsolete spares and minimize their carbon footprint and costs.

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Missing Equipment in ERP: In many of our Asset Data Management projects, we observe that a considerable number of assets (as high as 75% in some cases) exist physically on the plant site but are not registered in the ERP system. This means these particular assets are not being maintained or monitored properly. Imagine 20, 50, or, in the case we mentioned, 75% of your assets running without any maintenance. Such gaps in asset data lead to increased energy consumption, compromised safety, and an inflated carbon footprint for the entire facility. 

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Conclusion

The above pointers clearly establish a strong connection between asset management activities and the sustainability of Oil & Gas operations. Through robust asset management, we have helped a large number of production and processing facilities achieve their sustainability goals. 

Contact us to learn more about how you can partner with us to attain your sustainability and asset management goals.

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