Prevention of Counterfeit Material in Oil and Gas Industry
Authors: Elhadad Ahmed Elsayed 
Published: November 2016

Objectives/Scope

Counterfeit material is a serious hidden risk that jeopardizes functionality, performance and reliability of company assets, at the same time; it poses high safety and business risk. Material counterfeiting is becoming a greater concern in almost all industries, to name automotive, medicine and even air industries.

In Oil & Gas industry, use of counterfeit material can't be tolerated as it can have a disastrous safety and business impacts. This paper describes in detail real cases of counterfeit material discovered in ADMA-OPC (Major offshore Oil & Gas producer in UAE), the mitigation and control measure established by the company to effectively tackle this problem including an innovative technological solution already implemented and proved its great value.

Methods, Procedures, Process

To address risk of material counterfeiting, ADMA-OPCO has taken two actions complementing each other: Developed Procedure for Prevention of Counterfeit Material:The objective of this procedure is to ensure proper control of company's supply chain in a systematic approach aiming to prevent counterfeit material getting unintentionally procured in ADMA operations and projects. This procedure defines roles and responsibilities of each stakeholder and describes measures for identification of counterfeit material, their disposition and also recommends response protocol to be followed by all relevant stakeholders when counterfeit / suspect material identified.Established online training, examination and certification scheme:ADMA purchased materials are normally inspected by contractor's & vendor's quality inspectors, in addition, they are inspected and released for dispatch by ADMA TPA inspectors. Those inspectors are the first and most important barrier to discover suspected / counterfeit material and prevent their use in company projects. The main objective of this initiative is to enhance level of awareness of inspectors in charge of these critical activities and to ensure they acquire minimum skills and expertise to spot and identify any suspect / counterfeit material. Moreover, training also covers sequence of actions and communications protocol once a suspect counterfeit material has been discovered.

Results, Observations, Conclusions

The procedure and the online training initiatives are effective and systematic approach to protect company against risk of counterfeit material. It also beneficial to the whole industry by enhancing awareness of inspection personnel on detecting and handling suspect / counterfeit material. The value of the two initiatives were proved by the increased trend of discovered counterfeit cases after the procedure and online training system being implemented.

Novel/Additive Information

ADMA-OPCO supply chain and approved supplier list comprising thousands of contractors and vendors where material procurement and inspection is carried out locally and worldwide. Moreover, in projects, procurement process is not directly controlled by company; it's rather controlled and managed by EPC contractors. To deal with such a challenging situation and address the risk of material counterfeiting with all potential severe consequences, technology was the only feasible answer.

Online training initiative developed by ADMA-OPCO is an innovative and cost effective solution through which company could deal with a serious threat by reducing risk of material counterfeiting and adding value to the whole industry.