With increase in competition between OEMs of maritime assets and operators alike, the need to maximize the productivity of an equipment and increase operational efficiency and reliability is increasingly stringent and challenging. Also, with the adoption of availability contracts, maritime OEMs are becoming directly interested in understanding the health of their assets in order to maximize profits and to minimize the risk of a system's failure. The key to address these challenges and needs is performance optimization. For this to be possible it is important to understand that system failure can induce downtime which will increase the total cost of ownership, therefore it is important by all means to minimize unscheduled maintenance. If the state of health or condition of a system, subsystem or component is known, condition-based maintenance can be carried out and system design optimization can be achieved thereby reducing total cost of ownership. With the increasing competition with regards to the maritime industry, it is important that the state of health of a component/sub-system/system/asset is known before a vessel embarks on a mission. Any breakdown or malfunction in any part of any system or subsystem on board vessel during the operation offshore will lead to large economic losses and sometimes cause accidents. For example, damages to the fuel oil system of vessel's main engine can result in huge downtime as a result of the vessel not being in operation. This paper presents a prognostic and health management (PHM) development process applied on a fuel oil system powering diesel engines typically used in various cruise and fishing vessels, dredgers, pipe laying vessels and large oil tankers. This process will hopefully enable future PHM solutions for maritime assets to be designed in a more formal and systematic way
