KNOWLEDGE-BASED PROCESS SAFETY PERFORMANCE MANAGEMENT SYSTEM TO ESTABLISH KEY PERFORMANCE INDICATORS (KPIS) OF AGEING AND LIFE EXTENSION (ALE) FACILITIES IN THE UPSTREAM OIL AND GAS INDUSTRY

• Main Author: Haryo Bayu Sejati, Rahadian
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/85330
• Institution: Institut Teknologi Bandung

Nowadays, the Indonesia’s upstream oil and gas operations dealing with 70% ageing and life extension (ALE) facilities which have specific characteristics, factors, and criteria of process safety key performance indicators (KPIs). A systematic literature review confirms that there is not yet a fully sufficient process safety performance management system (PMS) framework for managing ALE production facilities. This research aims to design a knowledge-based PMS (KBPMS) to establish process safety KPIs for managing ALE production facilities in the upstream oil and gas industry. The contextual framework combines the KBPMS framework with Deming’s PDCA cycle to enhance process safety management and create a continuous improvement roadmap for the established framework. The research design uses a pragmatic paradigm in conjunction with deductive and inductive reasoning techniques, employs a case study strategy with a qualitative- quantitative methodology, and includes 112 of the 125 targeted respondents. The analytic hierarchy process (AHP) is utilized to construct and extend the KBPMS- PDCA conceptual framework, which prioritizes fit-for-purpose KPIs and resolves the stakeholders’ conflicting priorities. The chosen research strategy examines a statistical and longitudinal case study with a mixed method of System Dynamics (SD) and Multi Criteria Decision Analysis (MCDA). Data are collected by distributing questionnaires, conducting observations, focus group discussions, and in-depth interviews among key personnel and decision-makers pertaining to the aspects of process safety. The fundamental pillars of the contextual framework are covered in depth in the literature study by assessing the 23 existing process safety PMS models consisting of 26 process safety elements. In the early stages of model building, the development of a contextual PMS is aimed at improving traditional performance measurement methods that will consider interrelated aspects of process safety and financial measures. This research successfully addresses theoretical gaps in the field of performance management systems. First, this research successfully explained the key characteristics of state of enterprise (SOE) companies which manage ALE production facilities. Such companies are confronted with a conflicting trade-off between process safety compliance and production targets to achieve both commercial and safety obligations. Constantly encounter ever-changing policies and regulations, or even vague standards. Face difficulties of understanding the activation of critical safety devices on a real-time basis as early unsafe signal; have difficulties to convert ambiguous and complicated goals into an all-encompassing measure of achievement; distinct assessment models for performance evaluation which leads to producing double standards, and multi-layered responsibility structures towards members of society, government, political and professional representatives. Second, this study successfully identified factors that may affect the process safety performance in SOE company, namely leaderships support and commitment, risk management, material degradation and obsolescene, human competency, organizational capability, knowledge-based or learning organization, and safety- critical elements. Third, this research succeeded in formulating fit-for-purpose criteria for knowledge-based process safety PMS for managing ALE production facilities, namely provide mechanism to manage conflict between production and safety goals; stakeholders commitment about critical barriers compliance; benchmarking mechanism; strategy alignment mechanism; adaptable environmental changes; knowledge-based system in human competency performance modeling and real-time health status of facility operations. Forth, this study successfully developed a new knowledge-based process safety PMS-PDCA framework that has given an improved hierarchy for strategic, tactical and operational levels, consists of six performance management stages, including: company environment, business perspective, customer perspective, company competitive priorities perspective, internal process perspective, and resource and method availability perspective. Fifth, this research shows the results of testing a new PMS framework model to prove the effectiveness and efficiency of managing ALE production facilities in the upstream oil and gas industry, which reached 97% for the strategic module, 91% for the tactical module, and 95% for the operational module. This research offers significant contributions to both academia and industry practitioners by introducing a novel knowledge-based process safety PMS-PDCA framework that differs from the existing frameworks. Key contributions include; first, a novel framework combines knowledge-based performance measure design, system modeling, and continuous improvement principles into a comprehensive PMS model. Second, the contextual framework providing functions to manage performance conflicts through an analytical hierarchy process performance index and system dynamics models, addressing adaptability. Some prominent frameworks, such as the BSC, the Performance Prism, KB-PMS, and Six Sigma Business Scorecard (Lean Six Sigma), do not include these functions. Third, the suggested framework offers a practical tool for decision-makers in SOE companies to select, implement, and evaluate the effectiveness of process safety management systems, thereby avoiding silo thinking and misaligned performance targets. And forth, the KBPMS-PDCA framework promotes to wider stakeholders, such as Indonesian regulatory bodies, in developing and/or enriching current safety policies or regulations, e.g., Regulation of the Minister of Energy and Mineral Resources No. 32/2021; Decision of the Director of Oil and Gas Engineering and Environment No. 0196.K/18/DMT/2018, explicitly related to the use of process safety for the management of ALE production facilities in the upstream oil and gas industry.