Inspectioneering Journal

Reliability and Integrity – Keys to Survival

By Khulani Ndimande, Consulting Engineer at ABB Consulting, and Fernando Vicente, Asset Integrity and Reliability Consultant at ABB. This article appears in the November/December 2015 issue of Inspectioneering Journal.


The oil price slump has resulted in new budget constraints for oil and gas operators. That, combined with increasing production losses means that some, if not all, companies in the sector are going through a perfect storm. This requires somewhat of a new approach in how we address reliability and integrity issues. Managers are being challenged to run their facilities more efficiently and effectively, taking into account fewer people and lower budgets. In a recent survey from Oil & Gas UK, almost 50% of production losses were attributed to reduced equipment reliability, with other industries showing similar statistics.

Current financial and competitive environments make it imperative for organizations to explore new ways of reducing operating costs. One popular approach is to reduce spending on equipment maintenance, reliability, and integrity programs. However, this approach only has a short term impact on business performance. Maintenance costs can be reduced temporarily, but this comes with the increased potential for reliability and mechanical integrity problems later down the road. This inexorably leads to increased production costs, and eventually, a negative impact on safety and long-term business performance.

Figure 1. World Bank Commodity Crude Oil price forecast, October 2015.
Figure 1. World Bank Commodity Crude Oil price forecast, October 2015.

As seen in this forecast from World Bank, with projected oil prices remaining under $66.5 until 2018, an increase in production costs would result in many organizations facing serious challenges to stay competitive.

This article highlights several benefits of sound reliability and mechanical integrity practices and how they serve as the cornerstone of effective asset management. Moreover, we believe effective asset integrity management is not only important, but essential, to overcoming the challenges presented by operating in the current oil and gas market.

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