Proceedings of the 2011 International Conference on Industrial Engineering and Operations Management Kuala Lumpur, Malaysia, January 22 – 24, 2011 Condition Based Maintenance (CBM) in the Oil and Gas Industry: An Overview of Methods and Techniques Samuel Telford, Muhammad Ilyas Mazhar and Ian Howard Department of Mechanical Engineering, Curtin University, Perth WA 6102, Australia Abstract On and offshore development projects in the oil and gas industry are predominantly capital-intensive investments, with the potential for serious financial and environmental consequences should a catastrophic failure occur. Therefore, an efficient as well as effective maintenance management approach is essential to the continuation of production in a safe and reliable manner. This paper explores the existing literature on the development and applications of CBM in the oil and gas industry. The recent literature reinforces the fact that the role of CBM is critical to the smooth, uninterrupted, efficient and safe running of oil and gas facilities. The complex and integrated nature of the oil and gas facilities require specific and carefully prepared CBM programs with real-time condition monitoring data recording, analysis, and decision making to facilitate an accurate understanding of the essential maintenance intervals. This in turn can promote optimised utilization of plant equipment with higher levels of certainty and safety. Keywords: condition-based maintenance, condition monitoring, predictive maintenance. 1. Introduction Emerging challenges in the oil and gas industry are proving to be a catalyst for change in the management of facilities, new and old, worldwide. The growth in demand for crude oil and natural gas is unlikely to show any significant signs of slowing over the next decade or more, but the reality is that companies are faced with greater extraction costs due to: (1) the increasing scarcity of conventional crude oil and natural gas reserves, and (2) the difficulties associated with the extraction and/or processing of unconventional reserves found in oil sands, coal seam gas (CSG), shale gas [1], underground coal gas (UCG) [2], and reserves located in the depths of the oceans. Similarly, as sources mature, flow slows and costs increase as advanced technologies are required to enhance recovery. Another challenge, common to all industries, is the optimisation of equipment availability versus costs. Furthermore, due to the highly critical nature of the oil and gas activities, the industry cannot afford unexpected failures. Many companies are investigating the broader implementation of automation to reduce the number of employees required and the risks they are subjected to in a bid to improve efficiency and decrease human error and risks. There is also an increase in un-manned facilities, particularly in remote locations. These two trends will inevitably increase operating costs. From an investment perspective, the uncertainty in supply means that investors will be looking to low cost of production and maintenance operations to ensure the safety of their investment [3]. Due to these trends and challenges, oil and gas companies are looking to optimise production [4] and improve asset integrity management [5]. An effective maintenance program is an essential and significant component of operations with many benefits, including; the reduction of downtime due to unexpected equipment failure, which improves reliability and maintainability, increasing equipment availability and utilisation. Optimising maintenance also improves the useful life of equipment. Proactive or preventative maintenance (PM) strategies are an essential component of an effective maintenance program. The PM strategy known as condition-based maintenance (CBM) provides a dynamic understanding of equipment condition while in operation and is used to predict failure in mechanical systems through fault diagnosis from condition monitoring signals using diagnostics and prognostics [6]. CBM strategies are currently a major focus of maintenance and maintenance management research due to the aforementioned trends and challenges, increased complexity in industrial technologies [7], and advances in condition monitoring techniques that include the use of online systems [8]. Current literature on CBM applications in the oil and gas industry illustrates the 1152