September 14-15, 2012

* Refineria Isla Curaçao B.v. Emmastad, P.O. Box 3843. Curaçao ** University of the Netherlands Antilles. Jan Noorduynweg 111. Curaçao

1

Introduction

Main challenges

Asset Reliability Programs

Process of Maintenance

Key Performance Indicators

Maintenance to Replacement Value

Conclusions

2

• OLD & BIG REFINERY: BUILT IN 1915 - 330 MBD NAME PLATE

• LARGE AREA FOR MAINTENANCE:

55 PROCESS UNITS

16 JETTIES

400 TANKS

21 STACKS & 8 FLARES

KILOMETERS OF PIPING, ROADS, BRIDGES

BUILDINGS, WATER CHANNELS ETC

• TOURISTIC LOCATION

• HIGH IMPACT ON THE LOCAL ECONOMY

• LIMITED LOCAL RESOURCES 3

Safety first

Respect to environmental regulations

Frequent up and downs on prices of crude and products

Narrow net margins

High cost of projects

Costly downtime for maintenance

Keep performance in line with competitors to stay on business

4

Daily vigilance of key process parameters

Key technologies: Inspection (Thermography, Ultrasonic, Tank Scanning, Intelligent Piging, Radiology etc)

Corrosion (Stress Corrosion Cracking, Identification & Selection of Materials, Lab Testing etc)

Welding (Procedures, Post Weld Heat treatment, Qualification of Welders etc)

Metallurgy, Mechanics & Failure Analysis (Field & Lab Analysis, Design & Eng Review etc)

Rotating Equipment (Condition Monitoring, Vibration Analysis etc)

Quality control: new constructions, field & shop repairs, materials

Scheduled turnarounds using Risk Based Inspection (RBI)

Technical & constructability analysis of projects & plant-changes

Reliability software, documentation, record keeping

Application of comprehensive norms and procedures

Yearly training program of personnel 5

Planning & Economics (Short & Long Term; Corporate Integration)

Budget

Order of Materials (Bulk & Long Lead)

Engineering (Norms, Standards, Procedures)

Scope of Work

Contracting-out

Execution

Performance Evaluation

Reporting & Closure of Contracts

6

Plant Availability (%): No. of days able to produce/365 days x 100

Unplanned Shutdowns: No. of unplanned stops > 24 hours

Safety: No. of Accidents

Budget: Estimate vs Actual

Extension of Turnarounds (Loss of opportunity)

Service Factor

Mean Time Between Failures (Root Cause Analysis) 7

Maintenance Cost (Aprox.)

0,0

0,5

1,0

1,5

2,0

2,5

3,0

Co

st in

MM

$

Years

Fuel Oil Plant

Turnaround*

Routine

0,0

0,5

1,0

1,5

2,0

2,5

3,0

Co

st in

MM

$

Years

Lub Oil Plant

EOM

Turnaround*

Routine

*Turnaround costs are distributed on 2 to 4 years of production run cycles

0,0

0,5

1,0

1,5

2,0

2,5

3,0

Co

st in

MM

$

Years

Gasoil Plant

EOM

Turnaround*

Routine

8

Replacement value of plants has doubled in 10 years: Price increase of materials Higher cost of labor Business opportunity for suppliers due to higher oil prices

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Gasoil Plant (Values in millions $*)

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Fuel Oil Plant (Values in millions $*)

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Lub Oil Plant (Values in millions $*)

9

0

1

2

3

4

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pe

rce

nta

ge

Years

Lub Oil Plant MRV (%)

0

1

2

3

4

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pe

rce

nta

ge

Years

Fuel Oil Plant MRV (%)

0

1

2

3

4

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pe

rce

nta

ge

Years

Gasoil Plant MRV (%)

MRV = Maintenance Cost / Replacement Cost Worldwide Pace Setters: 2 – 4% 10

Lub Oil Production

Replacement Value (MM$)

Maintenance Cost (MM$)

MRV (%)

Revenue (MM$)

Asset Turnover (Revenue/RV)

MRV/Asset Turnover (%)

Train 1 49.3 1.9 3.9 35.4 0.7 5.6

Train 2 33.5 0.9 2.7 18.1 0.5 5.4

Train 3 108.4 1.1 1.0 27.4 0.3 3.3

Train 4 134.0 2.9 2.2 75.0 0.6 3.7

Overall 325.2 6.8 2.1 155.9 0.5 4.2

YEAR 2011

REVENUE & TURNOVER

Revenue & turnover are highly influenced by oil prices and product market Business valuation guides the technical analysis to identify what are the bad non-

economical actors Next step is to work on solutions for these bad actors

(e.g.: root cause analysis of recurrent failures & unplanned shutdowns; identify needs for upgrading; reinforce adherence to operating & maintenance procedures etc)

11

1. The effectiveness of maintenance in Asset Management has to be supported by: Comprehensive reliability programs Key performance indicators Measurement of the return of the investment

2. The sudden trend of increasing the cost of maintenance in

the last four years is a concern and needs attention to stay in business

Thank You For Your Attention 12

0

20

40

60

80

100

2009 2010 2011

Fuel Oil Plant (%)

Actual availability Target

0

20

40

60

80

100

2009 2010 2011

Gas Oil Plant (%)

Actual availability Target

0

20

40

60

80

100

2009 2010 2011

Lub Oil Plant (%)

Actual availability Target 13

0

2

4

6

8

10

12

14

2007 2008

2009 2010

2011

Un

pla

nn

ed

Sh

utd

ow

ns

Years

Number of unplanned shutdowns

actual

Target

14

1

2

3

4

5

6

7

2007 2008

2009 2010

2011

Ind

ex*

Years

Actual

Target

*Net frequency index = (Lost time accident* 1.000.000)/Man-hours worked

15

0

10

20

30

40

50

60

70

80

90

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Co

st in

MM

$

Years

Refinery Actual Vs Budgeted Cost

Actual

Budget

16