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The Fundamentals of Asset Integrity Management

Online Training Series Course Summary

COURSE A: THE FUNDAMENTALS OF ORGANISATIONAL


INTEGRITY

Module 1: Background, context, and why this subject is


important
What is Asset Management?
Asset management is best described as the optimum way of managing assets to
achieve a desired and sustainable outcome.
Every asset has a life cycle which starts from the business concept/business case
straight through the life cycle to dismantling of the asset.
A key success factor in a companys ability to operate safely and efficiently is ensuring
that every individual with a stake in asset integrity truly understands how their
actions and decisions can have a decisive impact

Why Asset Management?


Managing assets encourages an organisation to realize value now and in the future.
There are many challenges a company can face in the future but managing assets
effectively and efficiently allows it to be able to adapt.
We need to manage our assets and how we operate them in order to prevent major
incidents, but we also need to manage them to take advantage of opportunities and
deliver sustainable profitability.
Good asset management will provide value for the company which can be measured
in return on capital employed, economic value added, or in profit indicators.

What are the goals of Asset Management?


The management of assets needs to be in compliance with regulations and its
management has to be cost efficient to the company simultaneously with the
continuous improvement of operations.
Asset management goals are drivers for core business values such as business
continuity, profitability and operational excellence just to name a few.
Oil and gas operators need to assure the way they operate take into account the long
term implications of their operations ensuring excellence, sustainability for the
operators and the environment as well as the society.

An Asset Management Model/System


Based on the Asset Management goals and business values relations, the
following are the five main enablers that would help to realize the Asset
Management goals:
1. Policy and Strategy what is the direction of Asset Management, why we
do Asset Management? How we direct Asset Management? What
principles we will apply? How do we see this for long term?
2. Processes - an organisation needs to fulfil the first factor of policy and
strategy, therefore Asset

Course summary developed by Michelle McIntyre on behalf of Oil and Gas Fundamentals Oil and Gas Fundamentals 2012

THIS IS A CONFIDENTIAL SUMMARY OF THE CONTENTS OF AN ONLINE TRAINING COURSE FOUND AT WWW.OILANDGASFUNDAMENTALS.COM.
IT IS FOR THE REVIEW OF COURSE PARTICIPANTS ONLY AND IS NOT FOR DISSEMINATION COPYRIGHT RESTRICTIONS APPLY
The Fundamentals of Asset Integrity Management
Online Training Series Course Summary

3. Management, core Asset management and improvement processes


would need to execute activities
4. Organisation - an organisation must be able to execute these processes
and activites
5. People - the organisation must be staffed with fully capable and
competent people to realize these goals
6. Means - a company needs to provide the means and the core
infrastructure to support the people, organisation and process

These 5 main capabilities are further split into 11 domains:


1. Asset management Governance provides for the entire company, the
Asset Management methods and techniques, best practices and
processes.
2. Risk Management is an integral part of the Asset Management and is
applied in all domains to support the decision making process in order to
assure added value creation.
3. The Asset Management process starts with Asset Management Policy
and Strategy which provides the direction for Asset Management.
4. This strategy is translated to Asset Management Concept Management.
These strategies refine all the rules in order to manage the assets and
risks such as maintenance concepts and engineering concepts.
5. Concepts are then integrated into Asset Management Plans. For example

- Budget plans.
6. Asset Management plans are to be executed by an Asset Management
Service Provider, e.g. for asset utilizations, maintenance to assure asset
care and engineering for asset creation.
7. Asset Management Performance must be measured and known.
8. The performance needs to be Analysed, and in case of deviation from the
objectives, must be Improved.
9. These processes need to be realized by an Asset Management
Organisation with clearly defined roles/ accountabilities. All contractors
and third parties need to be included in the Asset Management process.
10. The organisation needs to be staffed with the right People with the
knowledge, competencies and culture. Leadership is an important
element in order to realize and implement Asset Management.
11. The Asset Management Infrastructure and means such as computerized
maintenance management systems needs to ensure the effective and
efficient realization of the Asset Management process.

The Importance of Organisational Integrity in Asset Management


There are many root causes that have led to minor and major incidents and
accidents in the industry such as Piper Alpha and Deepwater Horizon just to
name a few:

Course summary developed by Michelle McIntyre on behalf of Oil and Gas Fundamentals Oil and Gas Fundamentals 2012

THIS IS A CONFIDENTIAL SUMMARY OF THE CONTENTS OF AN ONLINE TRAINING COURSE FOUND AT WWW.OILANDGASFUNDAMENTALS.COM.
IT IS FOR THE REVIEW OF COURSE PARTICIPANTS ONLY AND IS NOT FOR DISSEMINATION COPYRIGHT RESTRICTIONS APPLY
The Fundamentals of Asset Integrity Management
Online Training Series Course Summary

o Senior management to take lead in seeking solutions (to safety process


issues) and ensure a response in other words, a lack of leadership or
lack of confidence
o Failure to respond effectively to a deteriorating safety situation which
would lead us to go to the emergency plans or maybe this illustrates a
lack of training
o Misperception of the hazard for sometimes we never fully understand
the hazard and this may be due to a lack of knowledge of the hazard
o Lack of Investment as sometimes we didnt foresee the means to
guarantee the renewal of our assets
o Lack of process safety culture - this may be because the right focus on
safety has not been encouraged
o Culture where production and budget compliance were recognized
before anything else - this leads us to question whether its about the
right policy or culture

What is Organisational Integrity?


Asset Integrity must be guaranteed but in order to do this, you must guarantee
the integrity of the whole Asset Management also known as the Organisational
Integrity.
The 5 main capabilities are now condensed into 2 main components:
o The people/human factor and The process system integrity

Organisational Integrity is about understanding what the right way to operate is, and then
operating in this way.

Organisational Integrity is intrinsically linked to the human factors and processes in


practice within a company. It is also
linked to the culture of the company that has integrity embedded in the systems and
procedures and that integrity in
embodied by all employees. If we realize both, we are on the right track towards an
integrity culture where it is obvious
that we know what are the right things to do and is embedded in our systems and that
we're doing the right things and
that the desired behaviour is embodied by our people.

Scope and Focus of Organisational Integrity in Oil and Gas


The Human/Organisational Context:
o Organisational Integrity is linked with Human Integrity from an
organisational point of view, dealing with integrated system approaches
and behaviours leading to knowing the right thing to do and doing the
right thing. So it is broader than having code of conduct in order to
prevent corruption, and its also broader than the human approach of
acting according to a personal set of values.
Business Context:

Course summary developed by Michelle McIntyre on behalf of Oil and Gas Fundamentals Oil and Gas Fundamentals 2012

THIS IS A CONFIDENTIAL SUMMARY OF THE CONTENTS OF AN ONLINE TRAINING COURSE FOUND AT WWW.OILANDGASFUNDAMENTALS.COM.
IT IS FOR THE REVIEW OF COURSE PARTICIPANTS ONLY AND IS NOT FOR DISSEMINATION COPYRIGHT RESTRICTIONS APPLY
The Fundamentals of Asset Integrity Management
Online Training Series Course Summary

o The focus of organisational integrity is related to narrow risk context such


as Asset and operational related risks for managing other business risks
such as finance, commercial or competitors is not taken into account. We
look at the risk associated with the operations and managing of assets and
other facilities.
o From the perspective of Asset Management goals, the focus is Health,
Safety, Environment and Security. These are linked with the organisational
goals. Good performance in HSSE will deliver good performance in asset
delivery (output), expenditures etc.

Building Organisational Integrity


An organisation has to achieve organisational integrity culture where everyone knows the
right thing to do and they do
the right thing. By doing this they will deliver the goals and create sole value for the
company. Organisational Integrity
has to be in line with the company values that one wants to achieve in the end.

How we go about building Organisational Integrity


It begins with what a company defines as important, what values and desired
behaviours does a company want and need to drive its business. This must be clear
and must be the compass and reference for the people and organisational
behaviour.
o Leadership is crucial introducing, implementing and maintaining these
values. No integrity without excellent leadership and no excellent
leadership without integrity.
o Communication and Participation - managers and leaders need to
communicate the Integrity Management and spread it out. They have to
promote the values and drive behaviour. The whole staff needs to know
and understand what integrity means to them and what are their
expectations.
o The Integrity Management System provides the framework for the working
of the organisation. Its a kind of code of conduct, it gives the vision but also
the required desired goals related to the policy, strategy, processes,
organisation, people and means.
o Risk Management approach is supporting the whole process by identifying
the risks and installing barriers in order to mitigate and or prevent
incidents. Risk management is also supporting the decision making process
in order to guarantee that we are doing the right things.
o This project approach must lead to an organisational Integrity Culture when
integrity behavior is asset embedded in system and processes and
embodied by people.

If your company wants to become a world class company and stay a world class
integrity based company, you have to work on 3 dimensions:

Course summary developed by Michelle McIntyre on behalf of Oil and Gas Fundamentals Oil and Gas Fundamentals 2012

THIS IS A CONFIDENTIAL SUMMARY OF THE CONTENTS OF AN ONLINE TRAINING COURSE FOUND AT WWW.OILANDGASFUNDAMENTALS.COM.
IT IS FOR THE REVIEW OF COURSE PARTICIPANTS ONLY AND IS NOT FOR DISSEMINATION COPYRIGHT RESTRICTIONS APPLY
The Fundamentals of Asset Integrity Management
Online Training Series Course Summary

o You have to instil Best Practices knowledge, skills and knowing that
you're doing the right thing.
o You need to instil the right Culture how people work together, what are
leadership's principles, what is the desired behaviour.
o You need to make sure that integrity is a Shared Goal.

Course summary developed by Michelle McIntyre on behalf of Oil and Gas Fundamentals Oil and Gas Fundamentals 2012

THIS IS A CONFIDENTIAL SUMMARY OF THE CONTENTS OF AN ONLINE TRAINING COURSE FOUND AT WWW.OILANDGASFUNDAMENTALS.COM.
IT IS FOR THE REVIEW OF COURSE PARTICIPANTS ONLY AND IS NOT FOR DISSEMINATION COPYRIGHT RESTRICTIONS APPLY