Executive Summary
The oil industry is one of the most dynamic and robust sectors that contribute to the economic growth of a country. Due to the lucrative nature of the oil industries’ production performance, oil producing organizations have continued to attract a wide array of personnel. Employers have the obligation to provide remunerations that are commensurate with the demands of the job. Since oil industries have been identified to be one of the most hazardous, risks have to be assessed, managed, and appropriately controlled.
One of the largest and most productive oil organizations in the world is Saudi Arabian Oil Company (ARAMCO). The safety culture and structure of ARAMCO has been strategically designed to ensure that risks and hazards in the work environment are effectively addressed. The current discourse hereby examines the safety practices of ARAMCO through a presentation of the company’s safety and management structure. Likewise, the hazards analysis method as applied to ARAMCO’s refining process would be described in greater depth and detail.
Concurrently, two (2) analytical tools are applied in evaluating risks and hazards in ARAMCO: the failure modes and effects analysis (FMEA) and the cost – benefit analysis. The FMEA would be applied in determining potential causes of failure in ARAMCO’s refining process, in general; and specifically in the following sub-processes: fractionation, conversion, treatment; and formulating and blending. The rationale for FMEA’s application, as well as the analytical tool’s strengths and weaknesses would also be presented. In addition, the best uses for FMEA, particularly in the oil industry, would be discussed to justify its effective application in ARAMCO’s refining process; specifically within the fractionation, conversion, and treatment sub-processes. On the other hand, the cost-benefit analysis is applied where fires due to leaks from the pipes near the distillation tower are potential hazards.
Introduction
Background Information
Saudi Arabian Oil Company (ARAMCO) is a state-owned oil organization of the Kingdom of Saudi Arabia (Figure 1) . Saudi Aramco was founded in the early 1930s with headquarters at Dhahran, Saudi Arabia. The President and Chief Operating Officer is Khalid A. Al-Falih since 2009. A total of 3.4 billion barrels of oil were produced in 2013 or 9.4 million barrels per day (bpd) . Forbes ranked Saudi Aramco as number one in the list of the world’s biggest oil companies .
Aramco Operations
There are different stages in oil operations. The current section expounds on oil exploration, production, refining and marketing, and finally, petrochemical manufacturing. Petroleum exploration is defined as “the process of exploring for oil and gas resources in the earth’s sedimentary basins” . Figure 2 illustrates the process in simple visual flow:
- Exploration: The exploration process entails searching for oil and gas resources, specifically from “complex onshore and offshore reservoirs and frontier areas in the Red Sea” .
- Production: The process of drilling and boring a hole in the earth’s surface to produce oil for various consumers.
- Refining and Marketing: The process of “separating the many compounds present in crude petroleum” . After the oil has been refined to finished product, the distribution and marketing process entails designing strategies pertinent to product, price, place and promotions to entice consumers to purchase the end-product.
- Petrochemical Manufacturing: The process of converting raw materials and feedstock into primary petrochemicals, petrochemical intermediaries and finally, to end product.
Aramco Safety:
The organization has openly signified commitment to the safety of the employees and other stakeholders . A culture of safety is inculcated through adherence to safety standards, as well as managing risks. The company showed institution of the following major safety initiatives:
- “Assessing and controlling risks;
- Improving safety standards, inspections and audits;
- Conducting safety training and education;
- Recognizing safety achievements; and
- Adherence of contractors to safety standards” .
ARAMCO Safety Structure:
Aramco has developed a Safety Handbook, which contains safety responsibilities, basic safety rules, operational safety processes; permit procedure and safety topics .
Management Structure:
The commitment of management to safety is incorporated in the Safety Handbook through Manager/Supervisor Responsibilities section . A proof of management’s commitment to safety is the lost time injury (LTI) rate which dropped by “18.2 percent from 2012 — and 25 percent from 2011 — to 0.09 per 200,000 work hours” . Likewise, environmental safety efforts are continuously being promoted in the organization.
Aramco Hazard Analysis Methods:
Hazards analysis and job safety analysis is conducted at Aramco on a regular basis through the office safety checklist. Any deviations from safety standards, based on the checklist and from reported injuries or illnesses incidences, are addressed accordingly.
In one’s opinion, the safety structure of Aramco is one of the best in the industry. The declining LTI rate attests to the efficiency of the safety standards, as well as the strategies for mitigating and controlling risks. The use of engineering and administrative controls enforces risk management in the organization. However, there is always room for improvement in enforcing safety policies and in monitoring them through continuous improvements.
Refining Process Description:
The petroleum refining process, (Figure 3), in Aramco is categorized into five (5) major areas: fractionation, conversion, treatment, formulating and bending, as well as other refining operations (“light-ends recovery, sour-water stripping, solid waste and wastewater treatment, process-water treatment and cooling, storage and handling, product movement, hydrogen production, acid and tail-gas treatment, and sulfur recovery” (OSHA: Refining Operations, n.d., p. 1).
The refining process is described as follows:
- Fractionation is described as the process of separating crude oil into hydrocarbon compounds.
- Conversion entails the transformation of the size of the hydrocarbon compounds through decomposition, unification, and alteration.
- Treatment processes prepares the compounds into additional processes and finished products.
- Formulating and blending processes combine “hydrocarbon fractions, additives, and other components to produce finished products with specific performance properties” (OSHA: Section IV Chapter 2, n.d., p. 1).
The end products resulting from these processes are as follows:
- Fractionation: gas, gas oil, gasoline, petrochemical feedstock, lube stock, hydrogen, cracked naphtha, among others;
- Conversion: iso-octane, lubricating grease, high-octane naphtha, petrochemical stocks;
- Treatment: high quality diesel and lube oil, high-octane gasoline, desalted crude oil, among others .
Hazards in the Refining Process:
The refining process includes hazards in the work setting that expose workers to injuries, illnesses, or even fatalities. The hazards identified in the work setting are ranked according to the severity with number one as posing extreme hazard to number 12 as the least hazardous (Appendix A).
Methodology
FMEA Analysis Summary:
The failure modes and effects analysis (FMEA) is an analytical tool which is qualitative and systematic in nature, which is designed to comprehensively identify the potential causes of failure with the aim of designing appropriate measures to prepare in instances where failure could not be prevented. As the term implies, the type of evaluative analysis enables organizations to shift thrust and focus on events that could possibly go wrong . From a designed structure, a FEMA can address questions such as:
- What could possible go wrong?
- What are the potential causes of failure or why would failure happen?
- What are the impacts or effects of these failures? .
Why FMEA?
FMEA assists in avoiding the catastrophic impacts of failure in organizations. The analysis can provide crucial information to decision makers, which can help them assume a pro-active stance regarding addressing potential causes of failures. Likewise, through the information, the decision makers can design appropriate strategies through recommended controls of action that can effectively minimize the destructive impact of the identified failures.
FMEA Strength:
FMEA is considered a pro-active technique that can achieve better quality of processes in addressing potential causes of failures. The following is some advantages for applying FMEA to prevent hazardous situations from occurring:
- The ability of the analytical tool to identify how failure could emerge or be encountered in the work setting or in a specific process.
- Through an analysis of the organization’s products, services, processes, or operations, the policymakers and decision makers are provided with crucial information, which can prepare them to minimize harm or the negative impacts of failures.
- Assuming a worst scenario through an evaluation of failures can help accurately identify methods for preventing these failures form occurring
- If the failure could not be prevented from increased probability or likelihood analysis, ways of mitigating the damaging effects can be designed through FMEA analysis.
- The following benefits are attributed to FMEA: “improved reliability of products and services, prevention of costly late design changes, and increased customer satisfaction” .
FMEA Weaknesses:
Despite the beneficial effects of the FMEA, reviews and discourses written on the subject matter has emphasized that the following limitations can be as follows:
- The excessive time, efforts, and resources needed to undertake FMEA.
- The focus on examining single points, there are tendencies to overlook the overall system.
- Assigning failure probabilities could be relative and subjective in nature. As such, the accuracy and reliability of the results would be influenced accordingly.
FMEA Best Uses:
The FMEA is best to be applied in evaluating single point failures within the following specifically identified industries:
- Process industries
- Aerospace
- Consumer products
- NASA
- The Department of Defense .
Applying FMEA to the Oil Industry:
FMEA analysis can be applied in the oil industry, specifically in evaluating relevant processes in an oil refining organization. According to American Society for Quality (ASQ), the FMEA could be used in any of the following situations:
- When a new product, service, or process is currently in the process of being either designed or redesigned;
- When there is an existing process that needs to be applied in an innovative manner;
- When there have been an evaluation made on the currently existing product, service, or process with specifically identified goals for improvement;
- When failures are being explicitly analyzed in a product, service, or process; and finally; and
- On a regular annual basis during the product (or service) life process .
Situations are not Good for Applying FMEA:
- Very short processes where potential causes of failure could be easily identified without necessarily going through the entire FMEA procedure.
- Very complex processes where potential causes of failure cannot be all covered in such a process.
How “FMEA” Analysis Works:
Conducting FMEA analysis contains five main steps, which are as follows:
- Include everyone who is involved in the process;
- List all failure modes and causes;
- Assign scores for the likelihood of occurrence; and
- Evaluate the results
A detailed explanation is as follows:
- The FMEA starts with an identification of the product, service, or process to be evaluated.
- Get inputs from the multidisciplinary team regarding potential failure modes, causes, and effects of the areas that are subjected to FMEA.
- FMEA template can be used to fill in relevant information pertinent to the area being evaluated.
- The team should agree on establishing a unified coding system, which will be instrumental in identifying system elements.
- Finally, the FMEA elements need to be comprehensively evaluated.
As emphasized, there are three specific questions to be appropriately answered:
- Identify whether the area being evaluated would result to an undesirable or intolerable loss: if the answer is yes, then, the evaluator would have to proceed on dividing the system into sub-systems, and further into assemblies ;
- Finally, from the identified failure modes, what are the failure effects? .
Appropriateness of the “FMEA” Analysis as Applied in ARAMCO:
The FMEA analysis is appropriate for Aramco and the analytical tool could be applied to the task of refining which includes the following sub-processes:
- Fractionation;
- Conversion;
- Treatment; and
- Formulating and blending.
FMEA analysis is appropriate for the refining process for the following reasons:
- Determine the potential failures in each of the sub-processes through the items or equipment used in the process.
- Determine the causes of the failure are accurately determined with the objective of detailing the effects in cases of failure, the consequences of exposure to risks, and more importantly, the proposed action to prevent the failure from occurring.
- Aramco top management as well as decision makers can have the result of the analysis to get the needed information, which can help in improving safety policies and procedures to ultimately prevent accident and failures in the refining process.
Results
Synopsis of the Main Data
The oil industry has many hazards that have a potential to occur, specifically in the refining process. Some examples of the hazards in the refining process are exposure to hazardous chemicals and gases, exposure to noise, confined spaces, and fires and explosions and may others. FMEA analysis is considered as a pro-active technique that can achieve better quality of processes in addressing potential causes of failures; therefore, FMEA was conducted in order to identify failure causes. The results of FMEA Analysis as well as the recommended actions are shown in Appendix B.
FMEA Analysis for Aramco
When the FMEA is applied to ARAMCO, the items evaluated within the refining process (specifically within the fractionation, conversion, and treatment) are as follows:
- The pressure check valves (machines used in fractionation)
Under the pressure valve and gas valve, the failure modes ranged from these items being left open, jammed closed, or exhibit propensities for leaks.
- The cracking unit (conversion)
- Thermostat (hydrocracking phase)
For the thermostat, the failure modes include failures to react either to increases or drops in temperature.
- Alkylation unit (conversion)
- Pipelines used in hydro treating (treatment phase).
An examination of the failure effects range from seeping of hazardous materials or vapors in the atmosphere (for pressure valve and gas valve) and tendencies for overheating (thermostat failure) or excessive drops in temperature, which compromises the standards of the oil by-products.
The targets for all items identified under the FMEA are personnel, property, productivity, or the environment.
Under severity of the failure occurrence, the items identified generated either a critical level of severity (I) or an average severity level (II). The severity chart is shown in Appendix C. Under probability of failure occurrence, the items identified generated either medium or high probability level. The probability of mishap is shown in Appendix D. The risk codes are shown in Appendix E, as well as the overall risk matrix is shown in Appendix F.
Finally, the action required would be intensified and regular monitoring of the items identified to prevent failure and mitigate potential injuries or fatalities that could happen due to the failure. Overall, the FMEA would assist decision makers in identifying potential failure of crucial items during the refining process, which could jeopardize productivity at Aramco.
A risk assessment after is conducted, and it is shown in (Appendix G).
In order to conduct a cost-benefit analysis, a brief description on how the fire hazard can occur is as follows:
Inside the distillation tower, the crude oil is boiled, the vapor then is condenses into various liquids hydrocarbon streams including:
- Jet fuel
- Diesel
- Gas oil
These different streams exit the distillation tower through four separate pipes that lead to other sections of the refinery (Figure 4).
Cost-Benefit Analysis
The cost-benefit analysis is a process helps in making a relative assessment of the benefits. The hazard analyzed is fires due to leaks from the pipes that are located near the distillation tower. As such, the hazard of fires or explosions can be controlled by the shut-off valve that can isolate any leak may occur. Any leak in the one of the four pipes can cause a potential fire resulting in various consequences including injuries, fatalities, loss of equipment, loss of property, and financial losses, which will subsequently affect the company severely.
Based on the previously stated consequence, a cost-benefit analysis for the fire hazard in the refining process is shown in Appendix H.
Conclusion and Recommendations
The costs and benefits were determined by the averages of the oil industry, and the data correlated with Aramco. As a result of the conducted cost-benefit analysis, one of the effective engineering controls is to install four shut-off valves. The four valves cost $ 3200; however, the estimated payback period will be almost within four months. As a large company like Aramco, $ 9900 is considered a short-time investment that ensures health and safety in the crude unit. It is clearly evident that the data are subjective; however, the recommended solution for the potential leaks that may occur in the pipes has a clear impact on mitigating the risks and hazards in order to avoid injuries or fatalities due to fires and explosions. Implementing the stated recommendation is beneficial to Aramco at minimizing the frequency of pipes inspections, and eliminating emergency shutdowns of the crude unit, which both help in continuing the operation without interruption in order to increase production.
Appendix A: Refining Process Hazards
Appendix B: FMEA Analysis
Appendix C: Severity Chart
Appendix D: Probability of Mishap
Appendix E: Risk Codes
Appendix F: Risk Matrix
Appendix G: Risk Assessment AFTER Actions Taken
Appendix H: Cost-Benefit Analysis
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