Managing Kuwait Oil Fields Reconstruction Projects

2

Managing Kuwait OilFields Reconstruction ProjectsMehdi Adib, Bechtel

Corporation PMI Canada

Proceedings, 1994, pp. 184-90

INTRODUCTIONhe Iraqi invasion of Kuwait cook place in

August of 1990 withTthe liberation in February 1991 following the

Gulf War. Almost all of the country's oil

production facilities suffered extensive damage.

The Kuwait Oil Company's (KOC) oil field

reconstruction project that was planned,

executed, and managed by Bechtel International

was actually conceived in November 1990 in

London, England. Planning and organizing the

reconstruction of the oil facilities continued

throughout the war in London, Houston, San

Francisco, Dubai, and Riyadh. This was during

the occupation but prior to the liberation. No

one knew at that time what the true magnitude of

the work would be; however, some casks could be

identified and front-end planning and

procurement for these tasks started immediately.

3

The scope of the restoration work was obviously

increased tremendously by the damage incurred

from the oil field fires that started at the end

of the war.

Bechtel project management personnel arrived

in Kuwait on March 4,

1991,three days after the allied troops had

completed their initial sweep of Kuwait City.

The main objective of this team was to organize

and manage the fire-fighting effort, This phase

of the project was named Al-Awada (Arabic tor

return).

The vivid scenes shown by the newspaper,

magazine, and television reports came alive for

Bechtel project personnel. The days were dark

with smoke from the fires blocking the sun, oil

droplets tilled the air, clean water and

sanitary systems were not working, power plants

were down, transportation was minimal as tires

were a precious commodity, and food was very

scarce, initial accommodation was in refurbished

ship quarters and in some vandalized apartment

complexes without water and electricity, no more

than a foam mattress on the floor, and a long

hike up a darkened staircase. In addition to

these problems, booby traps, land and water

mines, unexploded shells and rockets, and other

ordnance had littered the country. The temper-

4

atures in summer consistently were above 50° C

in shade (seldom below 37° C at night], exposing

the people in the field to temperatures of 55-

58° C in many locations, and hotter nearer to

the fires. Just providing drinking water was a

major undertaking. John Oakland, senior vice

president of Bechtel Corporation, who served as

the manager of projects in Kuwait, remarked,

"This campaign, which was well covered by the

international news media, was one of the most

complex engineering and construction efforts in

history (1)." However, the following assignment,

which was the reconstruction of the

Planning

Kuwait oil fields, was an even bigger and more

challenging task. The project management of the

oil production facilities reconstruction, which

was named Al-Tameer (Arabic for rebuild), is the

su6[ect of this report.

Status of tiie Facilities

The state of the two million bpd oil export

industry in Kuwait after the completion of the

fire-fighting effort was as follows:

• Six-hundred-forty-seven wells had burned in

total, 751 wells were damaged.

• Twenty-six oil gathering, separation, and

production centers were damaged or totally

5

destroyed.

• One marine export facility and its related

single point mooring was totally destroyed, and

the second marine export facility was partially

damaged and out of commission.

• The equivalent of ten million barrels of crude

oil storage tankage had been destroyed.

• The Shuaiba refinery was totally destroyed.

» A crude unit in the Mina Al Ahmadi Refinery

was completely destroyed. The rest of the

refiner}' was partially damaged and the refinery

was out of commission.

• The Mina Abdullah Refinery was partially

damaged and the units were not operable.

• All communication towers and networks were

destroyed.

• Most of the working population had either fled

or were in hiding.

AL-TAMEER PROJECT

After the successful completion of the fire-

fighting effort, KOC invited Bechtel to present

its plan for the reconstruction of the oil

fields production and exporting facilities

damaged during the war, starting work by

November

1990. KOC's goal was to be able to produce 2

million bpd of oil by September

6

1992.

PLANNING AND ORGANIZATION

The planning and organizing effort for the Al-

Tameer project started with the Bechtel team

that was already on-site as part of the Al-Awada

project fire-fighting effort.

An organization totally different from the

Al-Awada project was required to scope,

estimate, plan, execute, and turn over

operational facilities to KOC. This organization

had to be self sufficient and be able to fully

support and service a massive work force of more

than 16,000 people.

The main organization was divided into five

main functions. One was to support KOC's future

five-year budget planning with identification,

scoping, and planning future projects. This was

named KOC Major Projects Group. The other four

groups consisted of:

• manager Al-Tameer projects, responsible for

all planning and project management, as well as

engineering and procurement

• manager coordination, responsible for

scheduling, cost control, estimating, project

reporting, public and community relations, and

other relevant functions

• manager services, responsible for providing

7

all the required support services for the

project team including explosive and ordnance

demolition group

• manager operation, responsible for field

execution of all the defined work.

A damage assessment and scoping team

consisting of engineers, planners, and

estimators walked every foot of the oil fields

production and exporting facilities preparing a

scope of work, cost estimate, a plan and sched-

ule of work for each facility.

The planning was based on a back to front

scheduling defining the dates and production

goals first, working backward to see when the

drilling effort and facilities reconstruction

work had to start to meet this goal. This ap-

proach also determined the required manpower and

helped with direct hire and subcontracting

plans.

The overall plan defined the sequence of the

work and prioritized the resources to make sure

facilities with least damage were first priority

for completion.

The master schedule was developed based on

nine subproject organization work breakdown

structures ;WBS]:

• oil recovery

• tankage south

8

• North Kuwait

• pipelines/flowlines

• power, buildings, cathodic protection

• marine facilities

• desalters

• South gathering centers

• West gathering centers.

Each subproject having its task force,

budget, schedule, and its priority on resources

identified was headed by a project manager. The

Al-Tameer project organization chart is shown in

Figure 1.

The teams were integrated with available KOC

personnel who performed some of the project

runcttons. Each subproject team was supported by

local functional managers to provide them with

staff and resources to execute the work. The key

driver behind the plan was meeting the schedule

and the production capacity.

EXECUTION

The project execution consisted of three main

functions: detail engineering, procurement, and

construction management.

Detail Engineering

Engineering and construction teams worked very

closely during the planning phase to determine

the best and most expedient way of rebuilding

9

some of the facilities. This close collaboration

continued until construction was complete.

More than 200 designers and engineers worked

in the makeshift project offices at various

sites, with strong central support from a base

that was set up in an old war-damaged girl's

school. This was later transferred to a newly

constructed KOC engineering building.

Additionally, a team of more than

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30

Project Management Casebook

The procurement team was also responsible tor

incorporating all the material into KOC's

automated material and inventory control system.

The procurement effort driving the execution

phase was centralized, and it was divided into

three main areas:

• material management

• contracts management

• warehouse management.

Material management included purchasing,

inspection, expediting, and traffic and

logistics. Contracting included formation and

administration. Warehouse management included

central warehouses and satellite warehouses.

The procurement team had three main goals

within the project's overall objective:

« ensure the right material and resources were

available in time to meet the schedule

• maximize the use of available local resources

to assist in rebuilding the local economy

• ensure sure final warehouse inventory met

KOC's material coding and identification system.

The size and the particular nature of the

project required that the procurement team be

divided between material management—reporting to

the manager of projects—and contracts management


31

—reporting to the manager of construction. This

arrangement facilitated the communication and

management of site contractors' work with

Bechtel's direct hire construction work.

Material Management

Project managers were responsible tor

development and processing of the material

requisitions for their areas of responsibility.

Orders over 5100,000 required further approval

by KOC's manager of the Al-Tameer project.

Almost everything required for the execution

of the project had to be imported from outside

the country. At the early phases of the project

the port facilities, custom facilities, and

other services required for the proper impor-

tation of goods and services were not

functioning. Bechtel established a staging area

in Jebel All port of Dubai (UAE) to receive,

inspect, and accept material. Utilizing much

smaller vessels and boats, Bechtel then

transported goods from Dubai to various Kuwait

ports depending on availability and cargo size.

This plan aiso included most of the air

freighted material.

Because timely delivery of the material was

critical to meeting the project schedule, a very

detailed material requisitioning plan had to be

developed identifying every required detail.

This plan was then incorporated into Bechtel's

worldwide Procurement Tracking System (PTS) that

enabled all Bechtel offices to monitor and

follow through each order until it reached the

site.

At later stages of the project when Kuwait

ports and custom facilities became functional

the above arrangements were changed and

everything was imported directly into Kuwait.

During this period more than 26,000 purchase

orders were issued, and more than 520,000 tons

of material were imported utilizing 742 aircraft

and sea-going vessels.

Warehousing Management

One of the key activities of the warehousing

management team was to incorporate the variety

of material that was left behind after the war

and the fire-fighting phase with newly ordered

and engineering-specified material. Also, by

continuously adjusting and monitoring quantities

and specifications they could respond very

quickly to emergency and out-of-schedule cir-

cumstances.

The engineering and warehouse both utilized a


33

common software (PCMC) to identify, locate, and

quantify most of the bulk material making sure

that when the material was required it would be

made available immediately.

Contract Management

Although due to scheduled requirement

reconstruction of some of the flow line, all of

the gathering centers and booster stations were

performed by Bechtel direct hires, nevertheless

more than 300 major construction contracts and

650 equipment rental agreements were issued by

the contract management team during the Al-

Tameer project phase.

The contract formulation team worked as a

central group serving all subprojects. The

contract administration group managed the

administration work more by function than by

area. Project managers were ultimately the

responsible parties tor the contractor work m

their areas, receiving the necessary support and

services from these two centralized teams.

Construction Management

Al-Tameer was probably one of the most

challenging construction projects ever managed

by Bechtel. The work required provision of

labor, equipment, and support facilities in

fifty-five locations and in four different parts

of the country—North fields, South ¡marine

facilities and refineries), West fields, and

Burgan fields.

The work involved construction of drill pads;

roads for heavy rig transportation; well heads;

flow lines,- gathering centers; gas booster

stations; oil storage tanks; water supply,

distribution and storage; and marine exp on ter-

minal and loading facilities. In addition, KOC's

own infrastructure—offices, housing, clubs and

restaurants, warehouses and buildings,

telecommunication, etc.—had to be reconstructed.

Construction efforts were divided between

direct hire construction and subcontracted work.

The total scope of work was divided into nine

construction areas, each managed by a field

superintendent. Each superintendent was

responsible for both direct hire execution as

well as field administration of the

subcontractor's scope of work within his area.

Construction superintendents were supported by

the central construction group that was the

functional group supporting a project matrix

team. Prioritization of resources and

construction equipment was one of the major


35

functions of the central construction team.

Field construction teams were comprised of

multinational forces (from thirty-six countries)

with totally different cultures, languages, and

performance capabilities. Catering and other

cultural requirements had to be addressed to

ensure each group could perform its function

satisfactorily.

Each task had to be "tailor made"

to suit the team available. It was im-

portant that planning of the manpower

and resources take into consideration

availability of the right foreman and

support group to be able to com-

municate and perform work with each

team.

SUMMARY

Approximately 1,000,000 hours in the

regional offices and 4,000,000 hours

in Kuwait were spent for project

management/engineering/construction

management during the first two phases

of this project. Field labor hours

were 50,000,000.

These project manhours were spent

within the following project schedule

milestones:

• start of planning November

1990

• start implementation in Kuwait March

1991

• project completion June 1993.

The sources of the project

personnel were various. A total of

L6,000 workers from thirty-six

countries on five continents were

involved in this massive effort. The

countries that participated in the

supply of manpower to this

reconstruction included Kuwait, the

United States, Great Britain, Canada,

France, Australia, Belgium, Holland,

Germany, Ireland, New Zealand, Mexico,

Saudi Arabia, Egypt, [ran, Lebanon,

Bahrain, Yugoslavia, Colombia,

Indonesia, Nigeria, Bangladesh,

Brazil, Afghanistan, the Philippines,

India, Djibouti, Sri Lanka, Somalia.

Syria, Tanzania, Thailand, Tunisia,

Pakistan, Trinidad, and Sierra Leone.


37

ACCOMPLISHMENTS

• The work was conducted in fifty-five

locations that included fields in the

north of Kuwait on the border with

Iraq, west and south of Kuwait on the

borders with Saudi Arabia and Iraq,

and in the refineries and loading

facilities along the coast and

offshore.

• Five hundred square miles of land

were swept and cleared of unexploded

ordnance. More than 23,000 pieces of

explosive devices were destroyed by

explosive ordnance disposal teams.

Although all work areas were swept,

the risk from undetectable ordnance

was ever present and some fatalities

did occur.

• More than 26,000 purchase orders and

300 major construction contracts and

650 equipment rental agreements were

awarded during Phases I and II of the

project. [A more normal project

performed over the same time frame may

have 4,000 to 6,000 purchase orders.)

• A complete communication system

dedicated to the oil industry was in-

stalled that included twenty-three

satellite telephone systems, 4,500

telephones, and 2,000 portable radios.

• A twenty-four-hour health care and

safety program was established that

included two helicopter medivac teams,

a forty-bed hospital, a dental clinic,

and a team of approximately 100

professional medical personnel on duty

at seven medical stations.

• More than 5,800 pieces of field

operating equipment ranging from the

larger bulldozers, cranes, trucks,

front-end loaders, and heavy

industrial

equipment to ambulances, pickup trucks, cars,

buses, and other support vehicles were shipped

to the job sites. These pieces of equipment were

purchased from twelve different countries.

• A total of 742 aircraft and sea-going vessels

were deployed to ship more than 520,000 tons of

equipment and material to Kuwait in support of

this project.

• Six full-service dining halls with catering

support staff provided about 3,500,000 meals for


39

the workers during the fire-fighting campaign

and

10.0. 000 meals during the reconstruction

phase. Menus were established to cater to the

different ethnic backgrounds.

• Provisions and housing for 12,000 manual and

2,000 non-manual Bechtel employees were

provided. All of the members of project

management and their support teams, over 200

design and engineering personnel and about 200

procurement, administration, and subcontracts

management teams, were resident in Kuwait.

• Construction of a number of permanent offices,

workshops, warehouses, maintenance shops, and

housing complexes for KOC was completed at the

same time.

• Fire-fighting efforts originally involved the

four major international teams of Boots & Coots,

Red Adair, Safety Boss, and Wild Well Control.

They were later joined by an additional twenty-

three teams from Kuwait, Iran, China, Hungary,

Great Britain, France, Canada, Romania, and

Russia.

• Four hundred kilometers of water and oil

pipelines were installed during fire-fighting

efforts. Water lines and pumping stations could

deliver

25.0. 000 gallons a day to fire sites. Each

of 360 lagoons was excavated, lined, and filled

with 1,000,000 gallons of water for use in fire-

fighting.

• Drilling pads and access roads were

constructed for 700 new and workover wells.

• Three-thousand kilometers of new flowlines were

constructed.

• One-thousand kilometers of new and refurbished

pipelines were installed.

• Fifteen crude gathering centers, including a

totally new and modularized early production

facility, were assessed, designed, and

constructed.

• Three gas booster stations were constructed

• Restoration and reconstruction of the marine

loading terminals, offshore terminals, and SPM

were completed.

• Construction of more than 10,000,000 barrels

of new crude oil storage tankage was managed.

• Restoration of overhead and underground

electrical power transmission and distribution

system and cathodic protection system within the

oil fields was completed.

• Construction/repair and operation of water


41

systems jfresh, brackish, and salt water) were

completed.

• Construction and operation of oil recovery

systems and facilities that collected and

treated more than 25,000,000 barrels of

weathered crude were completed.

KEY MILESTONES

Some of the more notable milestones in

the program were:

• The last fire was extinguished and

the well was capped on November 6,

1991, eight months after the

arrival of the first Bechtel team on-

site.

• The first postwar oil was pumped

from two of the original gathering

centers on May 26, 1991.

• By December 1991, more than 400,000

barrels of oil per day were being

produced from the rehabilitated

facilities.

• By April 1993, more than 11,000,000

barrels of weathered crude had been

reclaimed from oil pits and lakes, and

processed through the held treatment

centers and the refinery.

• By the end of fune 1993, eighteen of

the original centers were back in op-

eration, with all the production goals

achieved as scheduled.

REFERENCES

1. Oakland, J.A. 1994. "Al-Tameer:

The Reconstruction at Kuwait." PM Net-

work, May, pp. 14-21.

Study Questions

MANAGING KUWAIT OIL FIELDS RECONSTRUCTION PROJECTS

1. This project was a major

undertaking. The challenges it faced

ranged from providing the basics for

being able to live in the desert

¡water and shelter] to finding

creative methods for getting imports

into the country through non-

traditional routes. From the author's

point of view, the project went rather

smoothly. To which factors do you

attribute the success of this project?


43

2.This case describes an enormous

undertaking made up of many different

projects. Which of these projects can

be considered the most important? Why?

3.One of the regular outputs of the

development of the project plan is the

work breakdown structure. Define the

work breakdown structure and its

benefits.

4.How were the multinational

relationships handled in this project?

5.This project was handled by the

Bechtel Corporation, a private

company, and not the Kuwaiti

government. List some of the

advantages to this project being

handled privately and not publicly.

6.Figure 1 shows the organization

chart of the Al-Tameer project. What

kind of organization does this

represent?

Managing Kuwait Oil Fields Reconstruction Projects

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