Holdfast Training Services Trial Blog

Background
Siemens offer Servicing Contracts for their Engines known as Long Term Plans (LTP), these broadly fit under two categories:

1. Preventative – Siemens will send Engineers to site to preemptively service the Engine in order to guarantee 100% running time (aside from during periods of planned servicing). The engineer on site, in consultation with experts back in Lincoln, will balance the cost of servicing/replacing components against the likelihood of failure during in the next running period (24000-36000 hours). “Over servicing” engines gives a higher degree of confidence that engines meet 100% running time, but also increases cost (components, time on site, Engineer expenses – hotel etc). “Under servicing” engines gives a lower degree of certainty. Civils if you’re still reading – think John Moran screaming RISK!
2. Corrective – Siemens will send Engineers to site only when an Engine Fault Occurs. Siemens has Engineers based all over the world to minimise travel time.

Siemens offer a remote Engine monitoring service that feeds engine telemetry data to Lincoln, from here Siemens can analyse the data to give advice to the customer in the event of a small fault without physically needing to be at site. Additionally, all this data allows Siemens to better predict component failure – a bonus for the preventative plans.

Generally speaking:
1. Smaller companies opt for LTPs to mitigate risk.
2. Larger companies such as Oil Majors (Total, Shell etc) prefer to remain as ad hoc customers for servicing. Why you may ask….. Because they are so valuable in terms of servicing revenue and potential new Engine revenue, that Siemens will drop more or less everything to get engineers out to site to fix the problem. If Siemens didn’t adopt this attitude, the likes of the Oil Majors would go elsewhere for New Engines (Solar, GE) and Servicing (Centrax), to name but a few competitors.

Dit from Last Week – Qatar Petroleum (QP)
QP don’t have an LTP with Siemens, however, Engine ceases to run Friday 3pm UK time with QP demanding an Engineer on site (offshore rig) within 24 hours. Cue much flapping, however an Engineer was on site within the time frame and reaching back to experts in Lincoln. Would Siemens extend this level of service to a smaller company at a more difficult location? Absolutely not, they would be told to wait in line.

Covid-19 Frictions
1. Mandated 2 week quarantines either side of international travel in some countries.
2. Some customers won’t allow engineers on site to conduct servicing at this point in time.

So What
Siemens have a growing back log of customers requiring servicing, however are unable to deliver it due to the frictions mentioned above. In the coming months there will be a time when Siemens will predict the likely failure of one of their Engines through remote Engine monitoring, but be powerless to send an engineer out to site to prevent it. In the event of a failed engine on a preventative plan, and in the eyes of the customer, Siemens have failed to meet the servicing contractual arrangements.

Bottom Line
Siemens will be looking to use Covid-19 as a Force majeure to free itself from the obligations in some of its Servicing contracts. I’ll be reaching for the popcorn when this happens.