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Long Term Scheduling of Major Renewals: Systematic Approach and Financial Applications
Norwegian University of Science and Technology, Faculty of Engineering Science and Technology, Department of Marine Technology.
2014 (English)MasteroppgaveStudent thesis
Abstract [en]

Much of the oil and gas installations in the North Sea originate from the booming ‘80s and ‘90s, and operators are facing considerable challenges in the management of their ageing assets. Harsh environments combined with tough operating loads make it so that systems must be upgraded, replaced or maintained; preventively or correctively. In many cases, it pays off to renew entire systems at a time, as components belonging to the same systems are exposed to the same operating loads, subject to the same obsolescence issues and interdependent. Typically, long term (strategic) plans consist of the same activities as shorter term plans. However, the degree of accuracy and detail is much lower, and they require a greater degree of cross disciplinary coordination. It may be challenging to collect and systematise information from various entities, such as operations management, procurement, material management, suppliers, contractors and legislators. This study suggests that FPSO contractors, as part of a systematised work process, utilises "Ageing Parameters" as qualitative measures on the deterioration and obsolescence the various systems are subject to. A parameter [0,100] should be established annually for each component to symbolise its condition. The parameter can be aggregated hierarchically from component level to system level according to the SFI structure and based on the Technical Condition Index framework by Andersen and Rasmussen (2003). Predefined criticality levels may act as weighting between components and between subsystems. The ageing should then be evaluated continuously using a top-down approach, to find if there are any obvious weaknesses on component level or on subsystem level. Subsequently, if a system renewal, as opposed to minor actions, proves to be appropriate, the optimal time and type of action for this renewal can be decided based on experience and available information. Further on, the activities and their costs may be scheduled and the information utilised financially. Floating production, storage and offloading vessels (FPSOs) are in many cases not designed to spend their lifetimes on a single field, but to redeploy at end of the first contract. When FPSO contractors investigate redeployment opportunities, they need to know as much as possible about future expenditures, to minimise their risk exposure. The cost and time frame of capital replacements are vital in this respect. The renewal activity schedule may be utilised to calculate the discounted cash flow of such activities throughout potential contract periods and along with OPEX estimates, expected revenues, RISKEX etc. form a decision basis for the tender terms. Depreciation is the difference between an asset‘s acquisition cost and its estimated residual value, more precisely, a way of allocating costs of assets to periods in which they are used. Since vessels consist of systems with various useful lives, the systems (or even components) should be depreciated separately, according to International Accounting Standard 16. By applying the methods from this study, the remaining useful lives of systems should be more accurately estimated compared to current standards in shipping, where depreciation mainly is charged as a constant cost for the vessel as one entity. More accurate depreciation may award companies‘ reduced taxes and increased financial predictability. International Accounting Standard 16 also highlights that obsolescence issues must be accounted for when estimating the residual value of an asset, because they contribute in the diminution of the economic benefits that might be obtained from the asset. This study has proven that a systematic hierarchy can be established based on SFI tags in computerised maintenance management systems, and that parameters on component level may be aggregated by this hierarchy and the given formulas to a meaningful and robust system parameter. It is also verified that the ageing of the systems can be evaluated systematically and effectively using a top-down approach. However, it has not been verified that the procedure can be implemented in largescale without taking up to much resources. Even so, the advantages this study has revealed, with regards to depreciation and tendering, could possibly justify the use of resources.

Place, publisher, year, edition, pages
Institutt for marin teknikk , 2014. , 110 p.
URN: urn:nbn:no:ntnu:diva-26701Local ID: ntnudaim:10991OAI: diva2:750223
Available from: 2014-09-26 Created: 2014-09-26 Last updated: 2014-09-26Bibliographically approved

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