Oil industry can get more at ease with ‘predictive maintenance’
Throwing in expensive solutions for niche works is just not done
Pinning down predictability has rarely been trickier than it is in the energy markets right now. In turn, the value of predictive maintenance is greater than ever.
Valued at $2.94 billion in 2019, the global predictive maintenance market is expected to reach $21.2 billion by 2027. This marks a compound annual growth rate (CAGR) of 28.9 per cent.
To be worthwhile, predictive maintenance technologies must allow either early intervention to prevent failure or reduce secondary losses. It is not enough to just go around detecting failures — the benefits of utilising such tools properly can be enormous. Studies have shown that predictive maintenance can boost productivity by 25 per cent, cut breakdowns by 70 per cent, and slash maintenance costs by 25 per cent.
$647b revenue lost per year
Such gains are especially valuable when up to $647 billion per year of lost revenue is due to downtime in manufacturing, which equates to a staggering $13 trillion in production value.
Consider these figures against a backdrop of low, if
stable, oil prices, plus intensifying pressure on energy markets to decarbonise in support of the Paris Agreement.
Perhaps what is especially astonishing is that these potentially huge economic losses are
largely avoidable; 89 per cent of asset failures occur at random and not because of asset age.
Rule of thumb
The energy industry’s cyclical and oft-volatile nature means getting predictive measures in place makes good business sense.
Energy companies can fall prey to investing in overly hightech and costly solutions for specific or niche potential failure cases, which then never happen. This is a costly backup plan. A good rule of thumb is only to apply predictive maintenance to an asset where failure is happening at least once a year.
There is also a tendency for energy players to wildly overestimate the potential savings incurred by installing predicting maintenance. To avoid this, operators must be brutally honest about their cost-benefit analysis before signing any checks.
Up to mid-century, oil and gas markets will be ‘sunset industries’; their influence fading as lower carbon energy markets gain momentum. This means that the big prizes in predictive maintenance must focus on two key areas.
One will be squeezing every ounce of efficiency from existing fossil fuel infrastructure; a vast system bursting with potential. The second is retrofitting brownfield assets with new technologies, including green energy projects, to curb the risk of stranded assets and overly expensive new builds. Proactivity pays off over the long-term in terms of safety, profit, and reputational value.