A Framework for Business Continuity to Provide High Availability in Floating LNG Operations Pete Winn and Alex Lal Velrada Value without compromise. Today’s agenda How does business continuity support a resilient operation? What’s changed with FLNG? A new approach to planning for FLNG. Why should we care? By way of introduction Established in 2009, Velrada is an award winning, Australian-owned, business and technology consulting firm with strong experience in resources around the Asia-Pacific region. Pete and Alex have delivered Business Continuity Planning engagements for a range of clients in the Oil & Gas, Mining, Engineering and Construction industries, and the Public Sector. Our consulting in this area draws on strong capabilities in: Pete Winn Intelligent Operations SME Operational Efficiency Integrated and Intelligent Operations Risk Management Organisational Change Management Analytics and Optimisation of Processes Supply chain and logistics optimisation Online Collaboration and Information Management Alex Lal Business Continuity & Disaster Recovery SME The role of business continuity in supporting resilient operation? RISK MANAGEMENT Well developed and delivered supported by legislation and license to operate Emergency Management (EM) Provision of highly available systems and technology mature in O&G Health & Safety (HSEC) Business Continuity Management (BCM) Disaster Recovery (DR) A mature practice throughout Oil and Gas backed up by solid historical evidence A heavy focus and highly mature function engrained in the culture of the organisation Often overlooked and draws together a number of functions throughout the business Expectations vs. Reality 63 % of a business functions have a recovery time of less than 24hrs. (Gartner: Ten Best Practices for Creating & Maintaining Effective Business Continuity Management Plans) 2 More than half weeks of organisations believe their ‘worst case scenario’ outage to be 2 weeks or more. (Gartner: Ten Best Practices for Creating & Maintaining Effective Business Continuity Management Plans) 13 in Organisations do not have an up-to-date business continuity or disaster recovery plan (Gartner: Ten Best Practices for Creating & Maintaining Effective Business Continuity Management Plans) 47 % of organisations do not know the cost of business disruptions in the last 12 months. (KPMG: global Business Continuity Management Program Benchmark Study) FLNG Changes the game Challenging cost Environment Leading to requirement for constant offloading in all conditions New technologies that aren’t understood in new environments Multiple concepts will be realised leading to a high variance in operating vessels Lack of support from nearby onshore facilities & supply base This is a new technology with a high degree of variability and a limited knowledge base to support efficient operations. With this in mind, can you still rely on identifying all the risks up front? What does this mean? Risks Mitigation Plans Scenarios Risks Mitigation Plans Scenarios Risks Mitigation Plans Scenarios Scenarios BCP Framework Recovery Strategies Scenarios Scenarios Scenarios Scenarios Getting it right Improvement INCIDENT IMPACT Normal Deterioration Level of Preparedness ‘MITIGATE’ Possible Recovery Points Effectiveness of Planning TIME ‘REMEDIATE’ A business continuity planning framework shifts the focus from reacting to specific known scenarios, to planning based on what’s important to the operation: reducing recovery time. Assess ”Understand the scope of the operation and prioritise based on value chain analysis and maximum acceptable outage” Assess ”Understand the scope of the operation and prioritise based on value chain analysis and maximum acceptable outage” Medical Extraction Production Planning Health and Safety Emergency Response Processing Reliability & Inspection Control & Operations Maintenance Planning Storage Surveillance Remote Assistance Business and Facilities Functions Offload Supply & Logistics Marine Operations Reservoir Contracting Optimisation Govern “Embed the framework define responsibilities, assign ownerships and embed in your continuous improvement process” Assess ”Understand the scope of the operation and prioritise based on value chain analysis and maximum acceptable outage” Test ”Check that the appropriate strategies are in place and understood throughout the organisation” Analyse ”For each function map out the critical human, information, physical, system and process assets and their interdependencies” Plan ”Identify and record recovery strategies for a failure in each asset competent of the business function Another operator has suffered a helicopter incident causing the grounding of a significant proportion of your fleet for safety concerns, this has lead to a lack of coverage for medical evacuation and a shut down of operations. NoShared backup Medivac process! Medical Evacuation No backup fleet! Helicopter Fleet grounded! Fleet Single Vendor! Helicopter Vendor Fleet Share Agreement Helicopter Contract Paper Copies CMS Outage CMS Detailed Process Instructions Contract Analyst Contract Manager ill! Manager Advanced Highly resilient with a degree of process automation. Monitoring tools in place and proactively used for future planning. Near-line BCDR capability that is well-aligned to business operations Mature Mostly resilient with some degree of process automation. System and infrastructure monitoring tools in place and proactively used to anticipate/respond to BCDR incidents. Somewhat Mature Processes are well defined but inconsistently applied. Monitoring tools in place but not used proactively. Core business processes and systems can generally be recovered within an acceptable timeframe. Immature Processes are defined and documented with some gaps, but are largely manual. Information used to prioritise business processes or systems in the event of a major incident is incomplete or not used Very Immature Little evidence of major incident planning. Processes are unclear or poorly documented. Little or no understanding of which business processes or systems to prioritise in the event of a major incident. Realistic . Achievable . Build confidence early . Iterate . . Buy in Key takeaways FLNG poses unique BC challenges. The risks are substantial and have changed and so should the planning in response to this. Planning and preparation is key to reducing the time to return to operations. Framework approach leads to a quicker return to normal operations. Thank you. www.velrada.com 1300 835 723 [email protected] @velrada © 2014 Velrada Capital Pty Ltd. All rights reserved. The information contained herein is for informational purposes only and represents the current view of Velrada Capital as at the date of the presentation. Velrada Capital cannot guarantee the accuracy of any information provided after the date of this presentation. Velrada Capital makes no warranties, express, implied or statutory as to the information in this presentation. linkedin.com/company/velrada Australia. New Zealand. Singapore.