Project Management in the Oil and Gas Industry

Oil and gas projects have special characteristics that need a different technique in project management. The development of any country depends on the development of the energy reserve through investing in oil and gas projects through onshore and offshore exploration, drilling, and increasing facility capacities. Therefore, these projects need a sort of management match with their characteristics, and project management is the main tool to achieving a successful project.

Written by a veteran project manager who has specialized in oil and gas projects for years, this book focuses on using practical tools and methods that are widely and successfully used in project management for oil and gas projects. Most engineers study all subjects, but focus on project management in housing projects, administration projects, and commercial buildings or other similar projects. However, oil and gas projects have their own requirements and characteristics in management from the owners, engineering offices, and contractors' side.

Not only useful to graduating engineers, new hires, and students, this volume is also an invaluable addition to any veteran project manager's library as a reference or a helpful go-to guide. Also meant to be a refresher for practicing engineers, it covers all of the project management subjects from an industrial point of view specifically for petroleum projects, making it the perfect desktop manual.

Not just for project managers and students, this book is helpful to any engineering discipline or staff in sharing or applying the work of a petroleum project and is a must-have for anyone working in this industry.

Autorentext

Mohamed El-Reedy has over 20 years of experience working on oil and gas projects and electric power projects, working with BP, Apachi, Amoco, Saipem, Agip. He has worked as a chief engineer with Worley Parsons in Egypt, and has published many papers in international conferences sponsored by API, ASME, ASCE, ACI. He has taught numerous courses in construction management and project management throughout the Middle East, Malaysia and Singapore, and he has published 3 books with CRC Press and 4 books in Arabic.

Inhalt

Preface xv

About the Author xvii

1 How to Manage Oil and Gas Projects 1

1.1 The Principal of Project Management 1

1.2 Project Characteristics 2

1.3 Project Life Cycle 5

1.3.1 Initiation of the Project 7

1.3.1.1 Getting to the Scope Baseline 9

1.3.2 Feasibility Study 10

1.3.3 FEED (Preliminary) Engineering 11

1.3.4 Detail Engineering 15

1.3.5 Decision Support Package 17

1.3.6 Design Management 19

1.3.7 Execution Phase 20

1.3.8 Commissioning and Startup 21

1.4 Is this Project Successful? 22

1.4.1 Project Management Goals 22

1.4.1.1 Project Integration Management 23

1.4.1.2 Project Scope Management 23

1.4.1.3 Project Time Management 24

1.4.1.4 Project Cost Management 24

1.4.1.5 Project Quality Management 24

1.4.1.6 Project Human Resource Management 25

1.4.1.7 Project Communications Management 25

1.4.1.8 Project Risk Management 25

1.4.1.9 Project Procurement Management 25

1.5 Project Management Tasks 26

1.5.1 Define the Project Target 26

1.5.2 Define the Scope of Work 27

1.5.3 Define the Time Frame 27

1.5.4 Define the Available Resources 27

1.5.5 Define the Cost 28

1.5.6 Evaluate the Master Plan 28

1.5.7 Accept the Master Plan 28

1.5.8 Schedule Follow Up 29

1.5.9 Cost Follow Up 29

1.5.10 Comparing Between Actual Work and Master Plan Cost 29

1.5.11 Performance Evaluation 29

1.6 Project Manager Skill 30

Quiz 31

2 Project Economic Analysis 39

2.1 Introduction 39

2.2 Project Cash Flow 40

2.2.1 Depreciation Methods 43

2.2.1.1 Straight-Line Method 44

2.2.1.2 Declining-Balance Method 45

2.2.1.3 Sum-of-the-Year-Digits 45

2.2.1.4 Sinking-Fund Method 46

2.2.1.5 Service-Out Method 46

2.2.2 Method of Net Present Value (NPV) 47

2.2.2.1 Inflation Rate 47

2.2.3 Minimum Internal Rate of Return (MIRR) 48

2.2.4 Payout Method 49

2.3 Economic Risk Assessment 50

2.3.1 Probability Theory 50

2.3.2 Probability Distribution of Variables 55

2.3.2.1 Normal Distribution 55

2.3.2.2 Log Normal Distribution 57

2.3.2.3 Binominal Distribution 60

2.3.2.4 Poisson Distribution 63

2.3.2.5 Exponential Distribution 63

2.3.2.6 Weibull Distribution (Rayleigh Distribution) 63

2.3.2.7 Gamma Distribution 64

2.3.2.8 Logistic Distribution 65

2.3.2.9 Extreme Value (Gumbel Distribution) 66

2.3.2.10 Pareto Distribution 66

2.3.3 Distribution for Uncertainty Parameters 67

2.3.3.1 Triangular Distribution 67

2.3.3.2 Uniform Distribution 68

2.3.4 Choose the Appropriate Probability Distribution 69

2.3.4.1 Chai Square Method 70

2.3.4.2 Kolmograv-Smirnov (K-S) 70

2.4 Decision Tree 71

2.5 Monte-Carlo Simulation Technique 75

2.6 Risk Adjusted Value (RAV) 78

3 Pitfalls in Time Schedule Planning 81

3.1 Introduction 81

3.1.1 Plan Single Point of Accountability (SPA) 84

3.1.2 Starting the Plan 85

3.1.3 Work Breakdown Structure (WBS) 87

3.2 Responsibilities of the Team 90

3.3 Expected Activity Time Period 91

3.4 Calculate the Activity Time Period 93

3.5 Time Schedule Preparation 94

3.5.1 Gantt Chart 95

3.5.2 Arrow Diagram Method (ADM) 95

3.5.3 Precedence Diagram Method (PDM) 96

3.5.4 Critical Path Method (CPM) 96

3.5.5 Program Evaluation and Review Technique (PERT) 97

3.5.6 Example 98

3.5.7 Application of the PERT Method 102 3.5.7.1 Statistics Calculation for Activity Time ...