(68a) Innovative Project Management for Large Scale Process Projects

"Innovative Project Management for Large Scale
Process Projects"

When we look at today's Oil & Gas industry, we see
projects that dwarf anything we have executed in the past. LNG projects in
Australia are running anywhere between $10B -$50B, petrochemical companies in
the Middle East are talking about projects in the $20B range, Offshore
production projects start the meter at roughly $5B - $10B and on and on.  These projects, in addition to being very
costly, have all sorts of execution and technical challenges. They are being
sited in remote regions of the world, the components are being fabricated in
all corners of the globe, technologies are being tested, and design and
construction resources are stretched to the maximum or beyond. All of this is happening
in addition to the fact that the engineering and construction industry is
seeing more resources exiting the industry (retirements, career changes,
natural attrition, etc.) than we are bringing in.

Facing this myriad of issues, owners today have to look
to innovative execution alternatives to address the challenges facing global
mega projects.  Typical considerations
include the most effective contracting strategy, techniques for resourcing the
team, logistical issues around fabrication, and transportation logistics,
etc.  For example, many owners today are
considering hiring a Project Management Contractor to oversee the project on
the owner's behalf.  This can be
effective but there are many pitfalls that need to be addressed in order to
make this type of organizational and contracting arrangement work. 

The planning, scheduling and estimating also has its
challenges.  The sheer magnitude of these
projects means that there are thousands of work packages.  The work packages are segregated into major
work areas which all need to come together into a master schedule and defined
cost estimate, in order for the owner to fully understand what they are
committing to.  The owner needs to truly
understand the financial commitment they will be making before approving
expenditures of this magnitude.  Most of
these projects are so massive that, to reduce the risk to any one owner, they
enter into a joint venture arrangement. 
This in itself provides issues, as the partners on one project can then
become competitors on another project. 
Confidentiality, intellectual property, trade secrets, etc. all become
issues.

In addition, most of these assets are either entirely
or partially owned by local governments and, as such, are mandated by local
content, social and infrastructure requirements.  These may include building local schools,
hospitals, roads, telecommunication systems, etc. as well as utilizing up to
80% of local labor for the engineering, contraction and operation of the
facilities.   

This paper/presentation will
address many of these challenges and will provide proven/tested execution
alternatives when planning these mega projects. 
One will note that, in addition to the above, we are stretching our
technical and engineering expertise and trying things that are larger, deeper,
stronger, faster, etc.  The combination
of the technical and execution challenges makes mega projects very difficult to
manage and control.