Life Extension Risk Assessment for Oil and Gas Assets

In this article:

1. Life Extension (LE) of ageing assets

2. Risk assessment study approach

   1. Step 1 - collection of operational and maintenance information

   2. Step 2 - workshop-based criticality assessment

   3. Step 3 - further evaluation

   4. Step 4 - establishing and concluding on the risk picture

3. Conclusion

Many facilities and equipment part the Norwegian Continental Shelf (NCS) oil and gas assets are approaching the end of their original design life. However, significant recoverable oil and gas reserves remain in some locations, extending the economic life of the field beyond the design life.

When this occurs, the operator is responsible for initiating a formal Life Extension (LE) process to assess whether safe and reliable operation can continue. This process requires comprehensive assessments — beyond routine integrity management — that demonstrate continued compliance with applicable regulatory requirements and with the lifecycle assumptions in the approved Plan for Development and Operation (PDO). Operators must also inform the Petroleum Safety Authority (PSA), now Havindustritilsynet (Havtil) and, where required, secure consent before operating beyond the originally approved life assumptions.

The results of the LE assessments form the technical and commercial basis of a business case presented to the license owners’ management committee. That committee (the management committee) endorses the LE strategy and approves continued operations in line with production license conditions.

A key step in the LE process is to evaluate the condition and functionality of systems essential to safety and reliability (structures, wells/subsea, safety & process systems, and systems affected by ageing, degradation or obsolescence) for the proposed extension period. Any gaps to applicable requirements should be assessed, and mitigations proposed so that health, safety and environmental risks remain As Low As Reasonably Practicable (ALARP) for the LE phase. Industry guidance (Offshore Norge/SINTEF) and Havtil expectations support a risk-based approach to these assessments, as described in this article.

Risk Assessment Study Approach

For conducting a LE assessment it is important to involve actors which together provide a wide range of knowledge and experience. A typical study involves meetings with vendors and workshop sessions with a multidisciplinary team of relevant stakeholders. Moreover, operational experience from similar systems is reviewed, with the overall objective is to develop a comprehensive understanding of the asset and its integrity.

The assessment should follow best practices such as those described in Offshore Norge Recommended Guidelines for the Management of Life Extension (chapter 4.4). This describes four stages which the process generally moves through:

1. Collecting operational and maintenance information;

2. Conducting a workshop-based criticality assessment;

3. Performing further evaluations of any identified critical or unacceptable failures;

4. Establishing and concluding on the risk picture for both the current and extended operational phases, with recommendations for improvement.

The stages are described in more detail below.

Step 1 – Collection of operational and maintenance information

This step includes a detailed review of the asset’s operational history. It may involve reviewing maintenance and inspection records and conducting interviews with key personnel. The purpose of this step is to reveal previous signs of degradation, identify any modifications made, and assess whether maintenance and inspections have been performed as intended. It may also give a better understanding of how the system is operated.

Step 2 – Workshop-based Criticality Assessment

The next step is about evaluating the risks in the current operational state and anticipating how those risks might change during the LE phase. This includes addressing key questions, such as:

• How can the system fail (e.g., erosion, wear, corrosion, material fatigue), and what would the consequences be?

  • Potential consequences include: loss of functionality, leakage and injuries due to exposure, loss of containment leading to ignition and fatality, release to sea or air with environmental impact, production stop, etc.

• Are those failures acceptable considering their probability and detectability?

• Are the failures more probable in the LE phase?

• Should any measures be implemented to keep the risk at an acceptable level in the LE phase?

  
  

The criticality assessment covers the following:

• Risk evaluation of the current operational state

• Risk evaluation of the LE phase, including changes in the risk profile due to system performance, environmental conditions, and operational parameters

• Risk evaluation of the LE phase with recommended corrective actions, including how such actions could alter the risk picture

It includes a systematic analysis of each potential failure mode and its consequences. The failure mode being the specific way a component, system or process fails to perform its intended function. Detailed system drawings are reviewed in order to assess all components. It is common practice to identify all failures first, and if a failure could have severe implications for personal safety, environmental integrity, or operations, its probability is evaluated.

Risks for each sub-system and components are assessed in line with the company-specific risk matrix, where an example of a risk matrix is presented below. Due to limited data availability in many LE contexts, probabilities are typically assigned qualitatively based on the combined experience and knowledge of the asset owner and vendors.  

When the risk has been assessed, failure detectability can be factored to provide a more comprehensive review to support decision making. This involves judging whether a given risk could be mitigated before leading to a critical failure, allowing sufficient time for corrective action or controlled production shutdown. Detectability principles are often drawn from Reliability-Centered Maintenance (RCM) and Failure Mode and Effect Analysis (FMEA). An example of how risk and detectability can be combined to form a new criticality ranking is also provided below.

Risk matrix example

Risk and detectability matrix example

Step 3 – Further Evaluation

If required, any critical or unacceptable failures identified during the workshop can be explored in greater depth afterward. This may include consulting vendors and subject matter experts, reviewing operational history in greater detail, or conducting in-depth studies of specific degradation mechanisms. The objective is to refine probability and criticality estimates and define more targeted corrective actions. Such follow-up enhances both the quality and defensibility of the risk assessment.

Step 4 – Establishing and concluding on the risk picture

The final results from all stages of the study should be compiled into a structured report that highlights key concerns. It should also provide a clear conclusion on whether LE is feasible, considering the recommendations made. Conclusions may be presented separately for safety, environmental, and commercial aspects, or for individual asset components. To ensure transparency, supporting materials such as workshop recordings and analysis data may be included as appendices.

Conclusion

By following this structured approach, operators can make well-informed decisions when extending the life of their facilities—balancing economic value with regulatory compliance, safety, environmental integrity, and operational reliability.

ORS has extensive experience with supporting assets approaching the original design life and the life extension phase — offering technical expertise, independent assessments, and strategic guidance. Get in touch with ORS to discuss how we can partner with you to maximize asset performance and ensure long-term operational success.