OpEx: A key enabler to future sustainability in the downstream sector

The key to continued success in terms of Operational Excellence (OpEx) is changing the culture of the workforce. Everyone must feel to be part of the team and be motivated to ensure improved performance. There is a new generation of engineers needed to allow companies to benefit from the new tools offered by digitalisation and connected plants, opine Colin Chapman and Ekaterina Kalinenko.

Colin Chapman is president at Euro Petroleum Consultants.
Colin Chapman is president at Euro Petroleum Consultants.
Ekaterina Kalinenko is project director at Euro Petroleum Consultants.
Ekaterina Kalinenko is project director at Euro Petroleum Consultants.

A high level of operational efficiency has always been of the utmost importance for the oil, gas and petrochemical industries. Companies invest billions of dollars in high-quality asset acquisition, and return on investment is only possible if plants are operated safely and efficiently. In the past five years, we have witnessed high volatility in oil and gas prices; so, the role of OpEx is greater than ever. Connecting machines, plants, data and people, digitalisation is already bringing huge benefits to many industries in different regions of the world. The oil and gas sectors have somewhat lagged behind in adopting such technologies and programmes. However, we are now hearing more examples of the Connected Plant approach offered by companies such as Honeywell, AVEVA, and others.

There are some very good examples of benefiting from digitalisation. European refiners are processing different crudes purchased on the market based upon availability, quality, price and which best suits their operations and markets. This relies on access to information and the ability to predict plant performance, and also any process changes. Of course, this approach is only possible in certain geographic regions – if we look at Russia, the situation is very different. The refining sector in Russia is quite specific. There are many large refineries in different regions of the country. Many were built during the Soviet times and located quite often inland, meaning less flexibility to vary the crude feedstock due to their geographic location. There have been several changes of ownership over the years and hence some refineries have undergone modernisation programmes, whereas some have lacked in such large investments. Here, there is a real opportunity to increase efficiency of refining operations by adopting some of the key aspects of digitalisation.

State companies such as Rosneft and Gazprom Neft own the majority of Russian refineries along with Lukoil, the largest industrial public company. The importance of such topics is clearly indicated in plans and achievements of these companies. Euro Petroleum Consultants have been organising specific forums based upon OpEx in Russia and in other regions for the past 10 years.

Most recently, we held the 5th Russian edition of the event in Sochi in November, bringing together representatives of refining and petrochemical companies and leading providers of technologies, services and solutions to discuss the key issues. The event was supported by both Rosneft and Gazprom Neft and attended with large delegations by all their major refineries. There was a real exchange of experiences between these important companies and this will be of real help to improve their future activities in their respective OpEx journey. In the opening speech of OpEx 2018, the director of oil refining efficiency department of Rosneft noted the high importance of improving OpEx for the company: “Today, Rosneft is the leader in terms of capacities and volumes of oil refining. The company’s activities in the field of refining in recent years were aimed at meeting the market demand for high-quality petroleum products and at increasing internal efficiency and competitiveness. Continuous improvement of production and management processes is the main source of added value and high asset margins.

Gazprom Neft representatives’ reports focused on projects already implemented at a number of their plants. The manager of perspective projects programme at Gazprom Neft shared plans and initial results of introducing innovative approach to operating management, which is called the Gold Standard System (OMS). The goal of this system is to ensure maximum OpEx for the company in terms of reliability and safety of production activities and the involvement of all employees in the continuous improvement process through corporate culture development. A similar system allowed corporations such as DuPont, ConocoPhillips, ExxonMobil, BP and Chevron to achieve a significant increase in production and financial performance. The first platform for the implementation of the programme was the Gazprom Neft’s Omsk lubricants plant. Special attention is paid to the most important components of any system for improving OpEx – human resources and their participation in the process. The corporate culture of OpEx is an indispensable link of all elements. Its level ultimately determines the extent to which the company achieves sustainable growth objectives.

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