Why late life assets need a different operating model

Across the industry, many operators are managing late life assets using operating models designed for a completely different phase of the asset lifecycle.

The model made sense when portfolios were growing but when they’re shrinking? That forces a rethink.

Most organisations were built to support expansion. Portfolios increasing, production rising and long-term investment driving stable operating structures. Engineering teams, technical authorities and operational support functions were designed around assets expected to run for decades.

Late life assets operate in a different context with portfolios contracting and production in decline. This is when investment becomes more selective. At the same time, the complexity of managing those assets often increases as infrastructure ages and the margin for error narrows.

Yet the structure around those assets often changes very little. For leadership teams, this creates a fundamental tension as internal teams designed to support scale are now applied to a smaller, ageing portfolio.

The question that increasingly follows is not whether those teams are capable. It is whether the structure itself still makes sense.

In many organisations, that question is being driven by corporate pressure. As portfolios reduce, there is a growing focus on the level of onshore support required to sustain them. Technical authorities, engineering teams and operational support functions that were once essential at scale are now being reassessed in the context of fewer assets and shorter time horizons.

Maintaining the same structure becomes harder to justify. At the same time, reducing capability is not a viable option. Late life assets still require experienced oversight, and in many cases more careful management than they did during peak production. The challenge now is not whether capability is needed. It is how that capability is organised and delivered.

This is where the conversation around operating models begins to change. Outsourcing late life operations is often framed as a binary decision. In reality, it is anything but. There is a wide spectrum of approaches available, and most operators find themselves somewhere between the two extremes.

At one end, the operator retains full control of the asset and supplements internal capability where needed. External specialists may be brought in to support specific areas such as engineering, integrity or operational delivery, but the overall structure remains internal.

Further along the spectrum, specific functions begin to move outside the organisation. Technical authority roles, engineering support or elements of operational management can be delivered through managed service arrangements, allowing the operator to retain accountability while changing how support is structured. At the far end are integrated models, where a partner organisation takes on responsibility for operating the asset itself.

Not every operator will move to that model, and many will not need to. Regulatory responsibility, internal capability and organisational preference all play a role in determining how far along the spectrum an operator is willing to go.

What is becoming increasingly common, however, is movement along that spectrum. Operators are not standing still. As portfolios evolve, so do their operating models. Functions are reviewed, responsibilities shift and external capability is introduced where it provides greater flexibility or reduces internal complexity.

But the real question is not where an organisation sits today. It is whether that position reflects where the asset is heading.

For some operators, a largely internal model remains the right fit. For others, the balance begins to shift as assets move further into late life and the demands on the organisation change. In those situations, the model often evolves beyond selective outsourcing.

What begins as support in specific areas can extend into broader responsibility for how the asset is managed day to day. Engineering support becomes operational support. Technical authority roles expand into wider accountability. The boundary between operator and partner becomes less defined.

Not because control is being handed over, but because the most effective way to manage the asset changes as it approaches its final phase. For leadership teams, this is where the decision becomes more strategic.

It is no longer simply about reducing cost or supplementing capability. It is about ensuring the asset is being managed in a way that reflects both its current state and what comes next.

That may mean retaining control internally. It may mean introducing external capability in targeted areas. Or it may mean working with a partner who can take on a greater role in managing the asset through its final years and into its next phase.

There is no single model that fits every organisation. But there is a common direction of travel. Late life assets are increasingly being managed through more flexible, integrated models that allow capability to scale with the asset and align more closely with its remaining life.

And as operators move further along that path, the question changes. It is no longer just how the asset is resourced, but how its final phase is planned and executed while it is still operating.