'Ready to Operate'

A common disconnect between Projects and Operations teams is the point at which a Project is 'finished'. The Project team believes the work is done when the asset is handed over to Operations and they declare it 'Ready for Start-Up'.

However, the Operations team knows that this is only part of the story and is the point at which the real work begins. For an asset to be 'Ready to Operate', the Asset Organisation must also be ready.

Initially the revenue generated from production is used to recoup the cost of building the asset, but a truly profitable outcome requires the asset to reach that 'break-even' point as planned then continue sustained production at the intended rate to generate a profit for the project sponsor (asset owner).

The target for this is the yellow trace on the above illustration, annotated as the 'Optimum Production Rate'.

At the point of handover (or completion of the Project) the Capital Expenditure (CAPEX) is all but completed and the advance Operating Expenditure (OPEX) has also been allocated or spent, therefore the Project has reached the point of 'Maximum Outlay' but has not yet realised any meaningful Production Revenue.

The early OPEX (pre-operations budget) must be spent on training, spare parts & consumables etc. to enable the asset to achieve 'Ready to Operate' status.

Only when the asset reaches the 'Break-Even' point, can it be considered a 'success' because it has achieved profitability. The level of success is then dependant upon the reliability, availability and continued sustained operation.

The Operations team needs to be able to operate and maintain the asset for the design life-cycle and therefore maintaining Asset Integrity is an essential requirement which must be designed into the asset.

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