May 17, 2020

Streamlining Inspection of Oil & Gas Well Sites & Facilities

4 min
Upstream oil and gas inspection can be streamlined with new methodology

Written By: Paul Schubert & David Scott


Oil and gas well sites and associated processing facilities present a unique set of inspection challenges. To address this, over 25,000 upstream oil and gas well sites and their associated processing facilities were inspected using API-510, -570, and -653 procedures and the systematic descriptive method developed. This methodology ensures consistent identification and communication of the type and priority of the deficiencies discovered, and establishes a time frame for their remediation.

The Problem

The inspections showed that there were a significant number of sites with deficiencies, the most urgent ones at well sites being Pressure Safety Valve/Pressure Relief Device issues and leaks. These required urgent responses to avoid catastrophic loss of containment. At newly completed well sites, “urgent priority” deficiencies were also discovered, due primarily to either faulty design, or failure to verify that seals were intact on all equipment after construction.

There are several drivers for inspection of any processing facility including regulatory, economic, health and safety considerations. Catastrophic failure of the pressure systems at oil and gas production facilities can lead to substantial damage to property and risk to employees. In many cases, the cost of inspecting the facilities is only a small fraction of the cost that would result if a failure occurred.

The protocols for conducting the critical systems inspections of well sites are well defined through standards and recommended practices such as API-510 (pressure vessels), API-570(pressure piping), API-653 (above ground storage tanks), API-520/521 (pressure safety valves).  However, inspection of well sites and their associated small processing facilities represent unique challenges, because well sites are generally highly dispersed geographically, often have diverse provenance, and generally are not continuously attended. The geographic dispersion means that there are usually many different inspectors involved in inspection of these facilities. Changing ownership of the well sites often results in highly variable maintenance histories. The lack of attendance may cause problems to continue for some time without being discovered. The impact of these problems could be substantially mitigated if a systematic approach to managing the inspection data was applied.

The foundation of the systematic approach involves answering the question “What is the problem?” The traditional method depends on expert inspection personnel being able to answer that question with sufficient accuracy and detail to allow an effective remediation plan to be developed and executed according to the owner’s maintenance and engineering standards. One significant factor impacting this process is the tendency of each inspector to describe their observations uniquely. Because each inspector’s findings are unique, the recommendations for remediation must be custom generated by knowledgeable personnel. This is a relatively expensive and slow process. Furthermore, because each finding is essentially unique, it makes it difficult to establish, transmit, and enforce corporate engineering and maintenance standards for remediation.


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The Solution

The essential first step in implementing a systematic approach is the development of a comprehensive list of mechanical integrity deficiencies which can be encountered during inspection. The inspectors in the field then select an observed condition from the list of predefined conditions. Thus “standard conditions” are established resulting in consistency among the inspectors, even in the case of them being in diverse geographic locations. Once the categories are established, it is fairly simple for experienced personnel to list the types of findings commonly found under those categories.

Recognizing that there are approximately 5% of conditions which are not readily classified allows the flexibility needed to have an effective system. Inspectors are free to adequately describe truly unique “other” conditions. If these become common occurrences, they are added to the list of “standard conditions.”

Using the systematic approach, it is possible to pre-determine the remediation priority for each standard condition, answering the question “How serious is the problem? Prioritization of the findings is derived from risk-based methodologies.

Having established standard conditions with predetermined remediation priorities, it is possible to answer the question “What’s the right action to take to remediate the problem?” By previously developing the next step to be taken when a high priority finding is made, the entire process for addressing such deficiencies is greatly accelerated.

Implementation of the systematic approach is essential in the process of managing the inspection data. Involvement of a third-party company ensures consistent identification and communication of the type and priority of the deficiencies discovered as well as accelerates the mitigation of the problems. With substantial experience and competence, SGS Industrial Services provides systematic approach to inspecting oil and gas production facilities, which ensures that installations, material, equipment, facilities and projects meet all quality and performance requirements.

Dr. Paul Schubert, SGS North America Inc.
David Scott, SGS North America Inc.

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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