PROJECT EXECUTION STRATEGIES OVERVIEW UpTech Upstream Oil & Gas Summit Designing And Building Success
AGENDA Industry Situation Traditional Project Stage Progression Project Schedule Compression Contracting Strategies and Tools to Achieve Project Success
Current Industry Situation Need for faster projects Cost and schedule overruns Mistrust Rigid gated procedures How can we develop systems for selecting the right execution strategy to satisfy project expectations?
How do we improve our project execution strategy selection? Need to understand: 1. Where are we? 2. Where do we want to end up? 3. Options available to get us there 4. Factors to consider (risk and benefits) Our goal is to help our customers be more successful.
Project Considerations Quality Scope/Safety Budget Schedule
Project Timeline Regular Project Schedule Tender & Procurement Long Lead Tender & Procurement Materials Concept FEL 1 Class 5 FEL 2 Class 4 FEED Class 3 Detailed Design Tender Construction Construction Commissioning & Start-up Project Sanction Kickoff Completion
Project Timeline Accelerated Project Schedule Tender Construction Concept FEL 1 FEL 2 FEED Detailed Design Tender & Procurement Long Lead Construction Tender & Procurement Materials Commissioning & Start-up Acceleration Kickoff Project Sanction Completion
Project Timeline Compressed Project Schedule Tender Construction Concept FEL 1 FEL 2 Feed Scope Change Feed Update Approval Delay Detailed Design Construction Commissioning & Start-Up Tender & Procurement Long Lead Tender & Procurement Materials Compression Kickoff Regular Project Sanction Project Sanction Completion
Project Timeline Accelerated Crash Project Procurement Long Lead Procurement Materials NO TENDER Concept FEL 1 FEL 2 FEED Construction Commissioning & Start-up Acceleration Detailed Design Project Sanction Kickoff Completion
Project Timeline Compressed Crash Project Procurement Long Lead Procurement Materials NO TENDER Conce pt FEL 1 FEL 2 Feed Scope Change Feed Update Scope Change 2 Feed Update Approval Delay Detailed Design Commissioning & Start-up Construction Compression Regular Project Sanction Project Sanction Kickoff Completion
Project Components Engineering Procurement Construction
Engineering Engineering Contractual Basis Lump sum Reimbursable target Fee as % of capital Reimbursable
ENGINEERING Engineering Contractual Terms - Based on Scope Definition
PROCUREMENT There are many systems that are used for procurement of equipment, material and services. Owner direct purchasing As agent on behalf of customer Zero dollar account Consultant/Contractor as part of contract
PROCUREMENT Once the procedure for procurement is selected, the way things get purchased can fit into different methods based on schedule constraints. Lump sum tender and bid evaluation Supplier cost plus fee Time and material at agreed shop rates Purchase stock items Purchase used items Use customer stock or used items
Construction Construction Contracting Strategies Tendered lump sum Tendered unit prices Cost plus fixed fee Cost plus % fee Force account
CONSTRUCTION Construction Plan Based on Design Maturity
CONSTRUCTION Construction Contracting Strategies - Based on CM Capabilities
Integrated Projects Lump Sum Tendered with bid evaluation, FEED as part of tender process Tendered with bid evaluation, FEED done prior to tender Cost plus fixed fee Cost plus fee as % of capital Reimbursable Project Execution Strategies / May 15, 2014
INTEGRATED PROJECT APPROACH Integrated Contracting Strategy - Based on Scope Definition Project Execution Strategies / May 15, 2014
The Keys To Project Success Assemble the right team for the project Forward planning - develop strategy early Understanding risks and benefits of each strategy Ability to recognize when to/and how to adjust strategy as project proceeds