Oil production maintenance planning at Argentina’s largest company

YPF oil tanker truck in front of mountains in Argentina

YPF is the largest oil producer in Argentina. It has 43% of the oil and gas production market and 58% of the gasoline market in the country.

Until 2012 the company belonged to Repsol S.A, when it was nationalized by the government of Argentina. This worsened the company’s international reputation and undermined its credibility. However, in 2013 Repsol reached a settlement, described by its chairman as “friendly” and “extremely positive”. The agreement revived the market in the country and has paved the way for investment in the vast newly discovered Vaca Muerta shale oil and gas field.

State-owned companies often experience problems with efficiency, and YPF was no exception - the company finished 2016 with a loss. However, problems had appeared earlier: in 2015, top management recognized the high operating costs and low efficiency of the company. A deeper analysis showed that one of the reasons was an inefficient system for planning maintenance at oil production facilities.

Every month, several managers would plan hundreds of maintenance jobs for equipment maintenance. The problem was that their actions were often not coordinated among themselves. This resulted in an inefficient use of resources and significant losses from downtime due to breakdowns or maintenance.

To reduce losses, YPF worked with Simcastia to develop a decision support system (DSS) for determining work schedules. It would be tested on one of the company's sites with the aim of applying DSS to all operations across the country in the future.

The system enabled:

  • Work order execution time increased by 11%
  • Preventive maintenance fulfillment increased to 95% in six months
  • Corrective maintenance backlog reduction of 56%
  • Unplanned downtime oil production losses reduction of 50%

The new maintenance planning system helped YPF save $18 million annually at the pilot implementation site. Forecasts suggest, the integration of the DSS with the work processes of other sites should save the company another $234 million per year.

More about the project - the history of success and presentation from YPF and Simcastia.

❔ Do you work in the oil and gas industry? Tell us in the comments, what other tasks might usefully be modeled, or how do you apply simulation if you already work in this area?

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