AP-Canada's Oil Sands Turnaround Cost Performance Benchmarking Study

May 30, 2014
Written by Staff
Asset Performance Canada, ULC ("AP-Canada") has the results of its consortium-sponsored "Oil Sands Turnaround Cost Performance Benchmarking Study." Study sponsors included Suncor, Shell Albian Sands, Shell Scotford Upgrader, and CNRL. Analyzing turnaround data from sponsor sites, the study examined the unique cost drivers affecting Oil Sands turnarounds and uncovered opportunities for cost savings. As Oil Sands facilities have matured, a new focus on operational excellence has arisen. In pursuit of this goal, turnaround costs represent one of the key factors driving competitive performance.
Turnarounds are sometimes referred to as "shutdowns" or "outages." The term refers to the periodic planned shutdown of a facility to perform maintenance work and execute new capital projects. Turnarounds are major events that can impact a company’s profitability through (1) the cost of the event, (2) the revenue lost due to the plant being offline, and (3) the potential harm to plant reliability that can occur if the turnaround is performed poorly. Additionally, turnarounds entail significant safety and environmental risks.

AP-Canada compared turnaround cost performance in the Athabasca Oil Sands region to that of non-Oil Sands turnarounds throughout Alberta as well as turnarounds executed in the U.S. Gulf Coast region. These comparison points allowed AP-Canada to identify costs unique to the Alberta region, as well as those specific to Oil Sands turnarounds. By breaking down costs to this detailed level, AP-Canada was able to isolate uncontrollable cost factors and focus on those costs that can be directly addressed and controlled by Oil Sands owner-operators.

The AP-Canada study is an industry first; there has been no prior study looking specifically at the cost drivers affecting Oil Sands turnarounds. The study confirmed that turnaround costs in the Oil Sands are among the highest in the oil and gas industry, and quantified the cost gap between the Oil Sands and other regions. The study represents the first step in driving Oil Sands costs down. Upon completion of the study, a report analyzing the overall results was presented to the sponsors. In addition, each sponsor received a site-specific report examining the site’s cost performance in comparison to group averages and identifying site-specific cost saving opportunities.

The study also examined schedule, safety, environmental, and scope control performance areas, once again establishing Oil Sands norms and comparing those with performance figures for non-Oil Sands Alberta turnarounds and U.S. Gulf Coast turnarounds.

AP-Canada plans to repeat the Oil Sands Turnaround Cost Performance Benchmarking Study on a recurring basis.

Asset Performance Canada, an affiliate of Asset Performance Networks, is the trusted leader for improving asset and operational performance in petroleum, chemical, and energy companies across the globe. The company’s solutions are a powerful hybrid of Software as a Service ("SaaS") and consulting expertise that together generate measurable results.

For more information, visit www.ap-canada.ca.

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