How much cost unplanned downtime each year?
Unplanned downtime has been an ongoing maintenance issue in the oil & gas and petrochemical industry for ages, but how much do organizations lose when operations are interrupted? That is a very important question to ask; because of the low oil prices, the negative impact of unplanned downtime on the bottom line will only increase. Also, within 5 to 10 years, over 50% of knowledgeable professionals in the oil & gas and petrochemical industry will retire.
Average costs of unplanned downtime
According to Kimberlite research, just 3.65 days of unplanned downtime a year can cost an oil and gas company $5.037 million. An average offshore platform experiences about 27 days of unplanned downtime a year, which can amount to $38 million in losses. There are also cases where the losses are as high as $88 million. Even short intervals of unplanned downtime can have significant financial impacts.
Average savings of unplanned downtime by using relevant data
Despite the large financial impact unplanned downtime can inflict, few oil and gas organizations utilize optimized maintenance strategies. Three out of four organizations take either a time-based or reactive approach to maintenance. Less than 24% report their maintenance strategy as predictive and focused on data or analytics. In the Kimberlite study, 42% of the offshore plants were over 15 years old. Data is the new oil According to the U.S. Department of Energy, predictive maintenance saves 8% to 12% over preventative maintenance and upward to 40% over reactive maintenance. This results in $34 million in cost savings annually. According to the study:
“Updating maintenance practices to more predictive efforts -driven by digital technologies and data-based optimization – can enable offshore production facilities to reduce their unplanned downtime and drive better operational efficiency.”
Why is data is necessary?
A data-driven approach to maintenance allows for more efficient upkeep and proven results to lower costs. Opportunities to integrate data or analytics include:
- Implementing optimized AML Information Management to record and adequately track your data
- Standardized collection and management of data related to asset conditions, failures, and performance
- Exploiting analytics to move towards predictive maintenance techniques.
Simply collecting data is useless if companies do not know what to do with it, and this is a significant challenge in the industry. In a study of Accenture, around 60% of operators, technicians, and engineers report challenges dealing with the outcomes of gathered data. So it is essential to set up KPI’s and data standards because it provides accurate summary level information and reports to improve operational and strategic management capabilities at all phases of the asset lifecycle. In that way, a company will benefit the most from an asset management system, like AML Information Management.