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OIL & GAS MEGA PROJECTS (TRACK RECORDS & IMPROVEMENT INITIATIVES) By: Engr. Seyi Omotowa

SHELL FLOATING LNG MEGAPROJECT (Circa US$12Billion)

Based on lessons-learnt, the following keys to successful megaprojects have been identified for action in our upcoming deepwater megaprojects:

1) Assign experienced project team early with focus to doing things correctly than always quickly because “Crude oil” is always marketable and the drive for having short project schedules oftentimes leads to a less-than-thorough job.

2) Improved optimization of our concept selection and field development plans.

3) More optimization of our contracting strategies.

4) Choose the right project delivery strategy to drive the project’s cost, schedule, quality of design, construction approach, operability and long-term maintenance demands.

5) Do more front-end work correctly; Improve FEED definitions and specifications as well as introduction of design verification process by all tenderers during the technical evaluation stage to optimize and have more robust and endorsed FEED.

6) Possibility of excising Detailed Engineering from EPC scope to reduce contractors influence in maximizing design to suit them in terms of cost and most especially because most of the EPC contractors subcontract the detailed engineering to major engineering consulting firms.

7) Preparation of well-defined work scopes in ITTs.

8) Ensure better cost estimation of projects and make adequate provisioning in provisional sums of EPCs to cover potential activities that may be envisaged based on lessons learnt on previous projects.

TOTAL EGINA DEEPWATER MEGAPROJECT (Circa US$12Billion)

9) Develop and align on realistic schedule and cost estimates that are achievable with operators based on previous project experiences. Need to further make efforts at shortening our contracting cycle time.

10) Need to grant faster approvals to avoid bid validity and currency fluctuation related claims/pitfalls, as we have observed that delayed approvals have accounted for significant chunks of our cost overruns.

11) Selection of only premium contractors from our tendering process.

12) Need to work more concertedly on project management in order to implement agreed schedule and execute works within budget.

13) Actively manage project risks (technical, scope, interfaces, schedule resources, regulatory, HSSE, PESTLE factors).

14) Develop project-specific policies and procedures

15) Assign project-specific roles and responsibilities

16) Have frequent team meetings to enhance collaboration and help maximize the benefits of having a combined project team.

RIYADH METRO RAIL MEGAPROJECT (Circa US$10Billion)

The following global collaborations and initiatives have been introduced to improving successful delivery of megaprojects:

1. N T N U - S t a t o i l - B e r k e l e y Initiative: The University of California at Berkeley, the Norwegian University of Science and Technology (NTNU) and Statoil signed a US$ 580,000 collaboration agreement to establish a new mega-project research programme at Berkeley to develop the best project and functions managers across the whole industry. The collaboration between academics and industry is crucial to further develop perspectives and skills in project development. The research initiative is called “Understanding Success and Developing Management Leadership on International Mega Projects”.

2. Relationship Contracting Model: Operators are adopting this model which is a flexible approach to establishing and managing relationships between operators and contractors and to implement proven practices and techniques to optimise risk allocation and project outcomes. This is mainly by ‘risk reward’ incentive agreements.

© 2015 NAPIMS
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