Calculating the Initial Spare Parts Inventory in Petroleum Projects with Cost-Benefit Analysis

Abstract

Abstract The first year of operation is a crucial period after the handover of a petroleum facility from the project phase. To minimise downtime and costs, it is essential to anticipate equipment breakdown, and one of method is to have spare parts readily available. There are studies on spare parts inventory forecasting based on the amount of historical operation data or condition-monitoring data. However, determining the initial spare parts inventory of a petroleum facility with limited historical data is a challenge, and often in the project phases the information is not comprehensive enough to support the decision-making. Thus, the paper will propose a decision-making method for the initial inventory of a new petroleum facility. The proposed method aims to simplify the spare parts assessment, defining the affecting parameters and simplifying the means to evaluate them. The result shows a means for determining the affecting parameters for various situations, as well as for ranking the criticality. Especially for the initial project condition or in events where data is not readily available, the current industry practices will be presented to mitigate the lack of information in the assessment. Finally, a case study is presented to show the application of the framework in two new petroleum projects.