petrotrin aging infrastructure

Topics: Petroleum, Oil spill, Production line Pages: 16 (4617 words) Published: January 9, 2015
PROBLEM STATEMENT : The effects of the aging infrastructure on the capabilities, production and viability of PETROTRIN. BRIEF HISTORY OF THE ORGANIZATION :
To fully understand the problem faced a brief history of the organization is necessary. What is now known as PETROTRIN started as far back as 1857, with one well completed at 61M deep. In 1866 the first successful oil well was drilled in Aripero, and in 1908 commercial production began. In 1914, the first successful well drilled by Trinidad Leaseholds Limited (TLL), one of PETROTRIN’S predecessor companies, the Helena 1 Well (FR1) was drilled and continued producing until 1990. Between the years 1911 and 1930 other discoveries were made in Tabaquite, La Brea and Guayaguayare. Additional to this, production increased from one million barrels per year to ten million barrels per year. The company expanded to include refining oil as well as importing oil from countries such as Venezuela to be processed. Emphasis was also placed on exploration. With the vast expansion and development of this energy based industry, foreign companies such as Texaco and British Petroleum were invited to assist in the development of the industry. By 1959, crude oil capacity was 135,000 barrels per day. As this company became a major source of income, the government sought to become a major stakeholder in its production and administrative functions. Over the years PETROTRIN has faced many adversarial issues from technological challenges, labour problems and extreme fluctuating market prices that led to unpopular measures being taken to ensure the company’s survival, from the glory days of the 1970’s to the stringent economic measures that had to be taken in the following decade when prices fell to ten dollars a barrel. Notwithstanding these realities, the company has managed to survive and still maintain its position as a major source of income for the state. With all the problems facing PETROTRIN however, there is an existing concern which, if not addressed can contribute to a crippling of the revenues and compromise the company’s viability. PROBLEM REALIZATION -:

The issue of aging Infrastructure is applicable to PETROTRIN for two fundamental reasons. The first reason being that PETROTRIN has been in existence for over one hundred years and has over this time period not been able to manage its infrastructure to accommodate the aging factor. When the company was first designed and installed, it was done so with the intent that the infrastructure would be resilient to wear and tear and maintenance would be at a minimum. As successive management changed, the policy of maintenance would have changed along with them. There would have been different ideologies with regards to how the company would be run and the communication between successive leadership would not have been as fluent to effectively address the issue. This coupled with the “out of sight, out of mind” component, which is basically once a problem is not visible then it is not a problem, would have led to issues only being tackled when it came to a point of concern. At this time the effects of these disasters could have been avoided if attention was placed in the monitoring of the pipelines, wells and refining paraphernalia. The design, and original layout were implemented so as to maximize durability with the available technology of its time. Additionally a lot of the processing infrastructure such as pipelines and gas lines were buried underground making accessibility difficult, and monitoring it a challenge. Changes in technological advancements may not have been applied so that these facilities could be properly maintained. Over the recent years we have begun to experience the effects of aging infrastructure and the lack of proper maintenance.This contributes to the higher costs and low margins currently being experienced. EFFECTS ON THE COMPANY-:

The effects of Aging Infrastructure on a company can be both direct and indirect...

References: -:
1. Petroconnect – Issue Number 131
2. Petroconnect – Issue Number 135
3. Petroconnect – Issue Number 138
4. Petroconnect – Issue Number 140
5. Petroconnect – Issue Number 143
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