As the oil and gas industry goes through cyclical downturns equipment becomes more and more idle. During these idle times it is important for service contractors and oil and gas operators to continue protecting equipment assets. Oilfield equipment storage is expensive and requires additional security measures to minimize losses. Below are property and equipment conservation considerations and techniques to control and mitigate idle equipment losses.
Area assessment ― Provide an overall assessment where equipment is stored.
- High/low crime area?
- Remote area with little or no traffic?
- Well-lighted area with high traffic and local police patrols?
Equipment assessment ― assess equipment values stored and equipment access from a theft standpoint.
- Update equipment list and scheduled values stored by item and location.
- Is larger equipment required to load your equipment?
Security controls ― provide on-site security personnel
- Preferred method of security due to the physical presence of personnel and ability to make immediate calls to police authorities and management.
- Most oil and gas work sites are remote presenting challenges due to low traffic and unlikely theft detection.
CCTV and other surveillance equipment
- CCTV cameras preferred when possible; remote locations can be difficult from a logistic standpoint due to internet availability ― cameras are recommended when/where possible.
- Onsite fixed motion-sensing surveillance technology can also be deployed to alert police authorities and management.
- Equipment placement can be an effective theft deterrent.
- Techniques include blocking lease roads with heavy equipment, setting up perimeter with larger heavier equipment and storing smaller items in the center of the perimeter, etc.
- Removing keys from stored or parked mobile equipment is recommended.
- Install hidden battery disconnect switches to isolate power from batteries to equipment’s engine starters.
- In some instances, removing equipment batteries can be preferred.
GPS asset tracking
- Recommended whether equipment is stored in low, moderate or high theft potential areas.
- Asset tracking has become more affordable ― alerts can be sent to user mobile devices in real time when equipment is moved.
- Equipment can be tracked and recovered in an efficient manner ― local police authorities are more likely to assist in recovery of equipment provided with GPS tracking software due to efficiency and high recovery rates.
Oil and gas equipment security best practices
- Surveillance personnel are recommended to monitor short duration stack outs and stacked drilling rigs set in remote oil and gas sites for extended time periods (up to a year).
- Deploy mobile trailer setups or drilling rig pusher shacks for surveillance/watch person quarters with portable electric generators or public utility power supply if available.
- During idle times store workover rigs in headquarter yards as these rigs are mobile with minimum ancillary loads.
- In cases where workover rigs are left overnight during well service operations bring power tongs and other expensive ancillary equipment back to secured yards each night.
- Service trucks used for work crew transport to/from worksites can carry power tongs and other smaller expensive equipment to storage yards and warehouses.
- Locks on doghouses are easily knocked off with a hammer and provide no real hurdle for thieves.
Generators, air compressors, iron, and other equipment used on completion/production jobs
- Materials and equipment can be difficult to move back and forth each evening after a day’s activities.
- Perform an onsite evaluation to determine if a night watch person is needed.
- Ongoing services such as frack jobs are typically ongoing and personnel are onsite 24/7 during these operations.
Lay-flat hose, aluminum piping and pumps
- Two types of service contractors providing lay-flat hose and piping are those renting the hose/pipe out to the customer and leave it in the field for extended stays without daily supervision; and service contractors sending work crews to jobsites and provide water logistics throughout well servicing operations.
- Monitoring and tracking lay-flat hose, aluminum piping and pump rental operations is challenging when oilfield contractors often rely on their customer to manage whereabouts and upkeep.
- Daily inspections to verify lay-flat hose, aluminum piping, and pumps are secured.
- Periodically update equipment schedules and valuations to agent with the distinction between “active” and “stacked” equipment.
- Inventory equipment by assigned locations as needed to maintain asset accountability.
- Refrain from hot work activities where large concentrations of equipment are stored in proximity.
- Assess environmental factors and adequately separate equipment prior to hot work activities when performing upgrades to idle/stacked drilling rigs, workover rigs, and other equipment.
- Implement hot work procedures and controls, including a fire watch person.
Contractual risk transfer (CRT)
- When equipment is moved to/from work sites and storage yards by third party trucking companies, properly screen trucking companies to ensure adequate contractual risk transfer (CRT) agreements are in place.
- Written contract agreements should be reviewed by legal counsel at least annually to ensure appropriate risk transfer language and limits of insurance are in place.
This material is provided for informational purposes only and does not provide any coverage or guarantee loss prevention. The examples in this material are provided as hypothetical and for illustration purposes only. The Hanover Insurance Company and its affiliates and subsidiaries (“The Hanover”) specifically disclaim any warranty or representation that acceptance of any recommendations contained herein will make any premises, or operation safe or in compliance with any law or regulation. By providing this information to you, The Hanover does not assume (and specifically disclaims) any duty, undertaking or responsibility to you. The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.