Global sustainability demands are increasingly defining innovation throughout the oil & gas industry, particularly so in the lubricants segment.
“Over the past 20 years, stricter regulations around the world have resulted in a drive towards reduced emissions, lower levelised cost of electricity and improved efficiency,” says Felix Guerzoni, Product Application Specialist at Shell.
“This has led to an evolution in equipment design and the way in which it is operated, placing greater pressures on the lubricants used to maintain them.”
As the number one global supplier of lubricants, delivering such products to consumers in more than 100 countries, Shell is positioned at the forefront of this technologically-driven curve.
One such facility that reflects this is the firm’s Shanghai Technology Centre in China. Focused on lubricant product development and application for China and the wider Asia region, the facility is dedicated to identifying transformational lubricants and oils.
Speaking to Guerzoni, a leading employee at the development centre, we gain insight into the Company’s outlook on the industry – an industry that is changing fast.
Asia Outlook (AsO): What has attracted you to staying at Shell for a period of 20 years?
Felix Guerzoni (FG): Technology and innovation remain a personal passion, and at Shell Lubricants there has been a continuous commitment and focus on investment in R&D to bring new products and services to the industry.
I consider myself fortunate to have worked in a variety of technical roles, supporting customers in over 40 countries, which has exposed me to many new diverse cultures and people. I enjoy the opportunity to assist customers in addressing their own maintenance challenges.
Importantly, I am always learning new things, giving me the chance to use my own knowledge and experience to mentor and coach other technical staff across our organisation. Knowing the work that our company and my own personal contributions bring to helping enrich the lives of our customers is rewarding.
AsO: Can you provide an overview of how the lubricants industry has changed during this period?
FG: Original equipment manufacturer (OEM) specifications for turbine, transformer and gas engine oils have had to evolve to ensure the development of higher performing products. As such, the base oil mix has changed, moving away from predominantly API Group I type base oils.
It’s not just the type of lubricants that have changed, but where they are used too. Demand in lubricants has shifted from historically mature markets in Europe and North America, to Asia Pacific, especially China and India, in response to population and GDP growth.
Although many customers see lubricants as a commodity purchase, often undervaluing the potential impact they can have on the overall operating costs and bottom line, with widespread internet access, customer awareness and best practice sharing has increased.
While from some OEMs we see a decrease in the focus placed on lubricants, partly driven by skills shortages or staffing levels, others are looking to suppliers such as Shell Lubricants to be true partners, working together to leverage each other’s expertise. Indeed, Shell Lubricants works with a number of OEMs in co-engineering projects, bringing synergies from hardware and lubricants and greater efficiencies. Meeting the current energy challenges will require increased levels of cooperation.
With the growing impact of digital in the industry, new services will continue to develop, and a supplier is no longer one who simply provides the oils and greases to a site, but a true solutions provider who can provide a range of products, services and expertise.
While many things have changed, the fundamental principles of lubrication and tribology have remained the same – ultimately, operators are looking for peace of mind by working with a trusted supplier.
AsO: How does unreliable equipment and a lack of maintenance lead to unexpected costs for companies?
FG: Shell Lubricants’ recent Powering Peak Performance survey, which investigated the maintenance practices of power companies, revealed that over two thirds of power companies in Asia have encountered unexpected costs because of unreliable equipment.
In today’s environment, where industry companies are under extreme pressure to provide more reliable power to meet growing demand, there is little appetite for unplanned downtime and increased maintenance costs, particularly in the face of stricter emissions targets, severe penalties for supply interruptions, tighter budgets and tougher operating conditions
Unplanned outages can prove to be extremely costly, so proactive and predictive maintenance is essential to provide reliable power. The majority of power companies recognise this, with 80 percent acknowledging that effective maintenance can contribute to valuable cost savings.
Yet, two in five also admit that they don’t prioritise maintenance until equipment breaks down. While the intention is there, day-to-day maintenance teams are not necessarily succeeding in implementing the proactive maintenance approach that they know is so important.
AsO: How can firms overcome these costs and reduce the challenges that they face?
FG: Effective lubrication management is a vital part of maintenance practices in any power plant, impacting up to 20-30 percent of total maintenance expenditure. However, over a third of power companies in Asia often experience costly breakdowns due to ineffective lubrication.
One of the first steps to reducing costs is to implement a total cost of operations (TCO)-driven approach to lubrication in order to help improve system efficiency and equipment reliability, extending oil life and reducing unplanned downtime. There are two key elements operators need to consider: selecting the right lubricant and applying effective lubrication management practices.
Selecting a lower performing lubricant rarely results in immediate equipment failure. However, this can lead to increased maintenance expenses over time and, in the event of disruptions from unplanned downtime, heavy financial penalties. These mounting costs can be far greater than the savings from selecting a lower price lubricant. At the same time, even the best product cannot perform effectively if it is not applied correctly at the right time and in the right way.
AsO: Is there a skills gap in the lubricants industry?
FG: Two thirds of companies recognise that they are not set up for success, with lack of staff expertise playing a role in their equipment breakdowns. This includes a lack of knowledge about effective equipment lubrication; over 80 percent agree that their maintenance staff would benefit from additional lubrication education.
This is why some key areas of lubricants are being overlooked. 48 percent don’t realise effective lubrication can help lower maintenance costs, while 45 percent also don’t recognise it can help to reduce equipment downtime. Through its Shell LubeCoach service, Shell’s technical experts can provide customers with training designed to better understand best practices.
AsO: Why is now the prime time to invest in new equipment and upskilling?
FG: In response to the need for more reliable power, the pace at which the industry is embracing a new generation of technologies to manage, monitor and maintain lubricants more effectively is accelerating.
Sensors, connected equipment, robotics, cloud-based and big data-based technologies are all playing a role in driving more efficient, optimised power supply, helping to lower total cost of ownership for plant owners and improving their competitiveness.
With a vast offering of technologies coming to the fore, the dawn of Industry 4.0 can be difficult to navigate. Today, information and data are more readily available to engineers, providing opportunities to gain new insights into their operations, presenting a shift in skillsets from more hands-on, practical knowledge to IT and data-based skills.
While a skills gap will clearly need addressing as technology evolves, new types of training around data analytics and predictive maintenance will need to be introduced in greater numbers to help engineers understand ways to manage these new technologies effectively, and maximise the power company’s investment.
AsO: Similarly, how crucial is collaboration between companies and expertise from third party suppliers in helping to overcome industry challenges?
FG: As is the case in any industry, it is vital that the workforce has the right tools, technology, and information to do the job well. When looking to optimise the end-to-end productivity and spend of a functioning power plant, it can be difficult to see the areas where gains are possible.
Around a third of power companies admit they find it challenging to keep up with latest maintenance best practice, for example.
Teaming up with third-party experts, like OEMs, lubricant suppliers and independent maintenance experts, can help to bridge this knowledge gap, improve maintenance practices and set businesses up for success. Asian power companies recognise the value they can bring; almost half believe external support would improve maintenance practices, while 80 percent say that a lubricant supplier who can share expertise would be valuable to them.
Therefore, collaboration and outside counsel – especially around the role of lubrication – is considered to be a vital tool for success.