Project Management Integration in the oil and gas, construction and general industries

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RESEARCH, FINDINGS AND PRESENTATION ON PROJECT MANAGEMENT INTEGRATION IN THE OIL & GAS COMPANIES, CONSTRUCTION COMPANIES AND GENERAL INDUSTRIES According to PMBOK 5 th edition- Project Management Integration is a collection of processes required to ensure that various elements of the project are properly coordinated, not to fail in a project, a manager (PM) must have the integration in mind as a spring board to achieving success in your project. Project integration is very vital in all project work be it in the oil and gas or the construction company. Project Integration is also an element of project management which helps in coordinating all aspect of the project, when properly performed , it ensure that all processes in a project run smoothly, it will produce a series of deliverables like project charter , scope management , project plan . Note: Project Integration involves making trade-off among competing objectives and alternatives to meet or exceed stakeholder needs and expectation. OIL & GAS INDUSTRY Today, large projects in the oil and gas industry face similarly challenging as they become increasingly complex and technologically demanding, contractors in the oil and gas follow prescribed practices for simple designs to deliver cost and time goals. In the oil and gas industry every project faces a network of stakeholders and so it is in the construction industries and other general industries. In the oil and gas it is very essential to use best practice and experienced talented project managers in executing their project. Successful project managers who are engaged in handling large project, follow a reference that guilds their decision process. These reference processes include:

Transcript of Project Management Integration in the oil and gas, construction and general industries

RESEARCH, FINDINGS AND PRESENTATION ON PROJECTMANAGEMENT INTEGRATION IN THE OIL & GAS COMPANIES,

CONSTRUCTION COMPANIES AND GENERAL INDUSTRIES

According to PMBOK 5th edition- Project ManagementIntegration is a collection of processes required toensure that various elements of the project are properlycoordinated, not to fail in a project, a manager (PM) musthave the integration in mind as a spring board toachieving success in your project. Project integration isvery vital in all project work be it in the oil and gas orthe construction company.

Project Integration is also an element of projectmanagement which helps in coordinating all aspect of theproject, when properly performed , it ensure that allprocesses in a project run smoothly, it will produce aseries of deliverables like project charter, scopemanagement, project plan.

Note: Project Integration involves making trade-off amongcompeting objectives and alternatives to meet or exceedstakeholder needs and expectation.

OIL & GAS INDUSTRYToday, large projects in the oil and gas industry facesimilarly challenging as they become increasingly complexand technologically demanding, contractors in the oil andgas follow prescribed practices for simple designs todeliver cost and time goals.In the oil and gas industry every project faces a networkof stakeholders and so it is in the constructionindustries and other general industries. In the oil andgas it is very essential to use best practice andexperienced talented project managers in executing theirproject. Successful project managers who are engaged in handlinglarge project, follow a reference that guilds theirdecision process. These reference processes include:

1.Continuous review to measure project value and monitoring: Successful oil companies or constructioncompanies continually assess their project, not onlyat a point of project initiation or execution, thiscontinuous review suggests ways to improve value orcut cost.

2.Formalized decision project phase and checkpoints: This is when there is need for decision making to moveto the next phase of a project, after the previousphase of a project, this decisions are made by projectmanagers coordinating with stakeholders when they areready to move on. To keep these phase/stage going, oiland gas industries and the contractor(s) who work withthem often and continuously revise the frame work ofthe project, they anticipate the needs of keystakeholders as they plan the steps toward completion,that is the PM and the contractors.A good PM will try to control the cost early in theplanning and architectural phase of a new project. NOTE: Costs are incurred in later phase of a projectapproximately 80-90 percent. (The cost of initialstart up is not the same with the cost of eachcompleted phase/stage. This means the cost of theproject at the finishing stage/phase, is always higherthan the initial start up cost)

3.Clear accountabilities within an integrated project team: Successful projects require effective decisionmaking. An integrated project team with clear rolesand responsibilities and a shared interest in theproject’s objectives, helps to ensure accountability.In a company where there is no clear definition ofdecision and accountability of a project it willcreate delay as decision making in a project canimprove the speed of execution.

4.Checks and balances between project central function and project team members: This has to do with staffingthe right people, defining process and ensuringcontrol of managerial and technical activities. In

turn, project team must be able to make the decisionfor the projects’ deliverables. In oil and gas,projects are likely to succeed when the functionalexperts (that Is PM & contractors) have an advisoryrather than a decision-making role in assurance,control and driving activities. NOTE: It is advisable for the oil and gas companies toemploy new technical and talented project managers andengineers with experience over the years as the olderones retire, it is not advisable to bring in secondrate talent to the project as they approach projectsof greater complexity and scope, this will help avoidcostly mistakes that would delay project longer thanestimated.

5.Competency development across capability: A good framework is very essential, but it’s not enough to satisfythe demand of major projects in the oil and gas. Oiland gas industries must continuously improve theirgeneral project management skills, schedules,technical demands and stakeholder requirements whilealso coordinating between the functional center andproject team.

In the oil and gas, all areas are important, but inthe role of project management there are areas thatare particularly important:1.Engineering2.Procurement3.Local content4.Risk and opportunities

Critical research definitionsEngineering: Some problems and unnecessary complexityin major projects challenges are due to over-engineering, when we engineer a project withsimplicity, it can ensure efficient competitivesolutions. Overseeing a project in the oil and gasindustry as a project engineer or a project manager,it demands putting timeless effort to achieve the

goals and objectives of the project in time and onschedule in a simple and proven constructiontechniques, setting a bar of proof from any deviationthat changed from the originally given scope.Using Bain oil and gas, project engineer reviewed 71complex engineering actions, from rotating machineryto the layout of pipes, to find simplifications thatsaved between 1% and 2.5% of cost.

Procurement: Procurement has to do mainly withvendors, in the oil and gas companies some of them arerationalizing their procurement relationships, movingfrom many shallow relationships to fewer but deeperones. This grammatical term means that many oilcompanies are disengaging from multiple contracts withsome of their previous vendors, but still maintaintheir relationship with serious minded vendors whodeliver effectively. This means that the oil and gascompanies hire vendors for project execution. Example,some oil servicing companies may serve as vendor tosome oil and gas industries/companies.Local content: Project managers must understand therequirement and plan accordingly, taking into accountthe relevant risk. In some cases, services are notavailable from the local source, or the localproviders (oil servicing companies) are not able todeliver against objectives. When a project managerfails to plan for these contingencies it can delay aproject and send it over budget.Successful project managers seek to understand thegoals. They engage policy makers to create long timestrategies that go far beyond their immediate supplierneeds, promoting best practices that help localindustries to meet global standards.Risk and Opportunities: In the oil and gas industry,risk identification and evaluation is a continuousprocess throughout a project’s life cycle and acrossthe project portfolio, taking a systematic perspectivethat consider projects, their phases and relevant

risks during the project life cycle. As the oil andgas industry embark on a new generation of majorprojects, project managers will need to rely onconsistent and coherent reference frame works thatguide their decision and engage good talent they canso as to keep pace.Most importantly, oil and gas industries work withcontractors to determine how risk will be shared. Thiscan forge a much closer relationship than just simplytrying to transfer risk to contractors while reducingcost and risk for the managing organization.

MANAGING LARGE CAPITAL PROJECT IN THE OIL & GAS COMPANIES, CONSTRUCTION COMPANIES AS WELL AS

OTHER GENERAL INDUSTRIES.It has been proven that in project management not all

projects are successful. In the oil and gas industries andother oil servicing companies successful project managers

rely on a collection of essential skills:

1.Project management: Manage trade-offs among cost,schedule, technical solutions and stakeholdersrequirement to ensure the project’s value.

2.Local content: Ensure proper liaising withstakeholders while meeting requirements to uselocal content and contactors.

3.Cost and schedule: providing accurate estimate andcontrol of project results, from initiation tocompletion, monitoring project cost and schedule.

4.Human Resource: Manage resources, training andcompensation to ensure that the necessary skillsare available to the project when need. Thereshould be a stand-by trained project team form thecompany for each new project or otherwise may gohiring.

5.Risk and opportunity management: This is tominimize the consequences of threat whilemaximizing opportunities in a systematic andconstantly update process.

6.Contracting: Define and manage contracts to meetquality, cost and schedule requirements. Orliaising with contractors to meet quality, cost andschedule requirements.

7.Engineering: Identifying technologies that deliverinnovation and competitive advantage in terms ofquality, cost and schedule of the project whileavoiding over-engineering no matter the type of oiland gas project it is.

8.Procurement: find or source goods and servicesbased on best market opportunities. Here it isadvisable to source goods and services beststandard in a lower cost, there are vendors who arewilling to give the best machineries and man-powerat a lower cost and at best services.

9.Production operations: Taking into account allaspect of the asset’s operations and maintenance,from conception or initiation until the project isconcluded.

Oil and Gas Project Categories involves

Onshore Production Facilities (Could be to build a machinery or plants for some use of production on land level, this requires indoor and outdoor knowledge)

Onshore Storage Facilities (Could be to build a chemical storage plant)

Petrochemical and Chemical Refineries (Could be to build a petrochemical refinery or plant)

Pipelines (could be to connect pipelines carryingoil from the point of exploration or extraction

to the refining point, this pipeline goes a long mile from point to point)

Terminals (could set up a terminal, this could bedone indoor or outdoor depending on the initial plan)

Onshore Field Development (Drilling) (could be toset up exploration drilling machines on the fieldwhere oil is found (Petroleum Technology)).

Offshore Production Facilities (On sea level project, this requires extensive knowledge)

Carbon Capture and Storage Facilities (On land level project)

Offshore Storage Facilities (On sea level project)

Offshore project are projects that involve seas and oceans, projects that are done outside the land are called offshore, as the name sounds, off-shore. It involves Riggs (standing in the water to drill or extract oil), this is operated from the sea not on dryland. It is a man-made structure in the sea.

Onshore projects include things like building petrochemical plants, chemical processing plants, refineries etc. Which are built on dry land.This is man-made structure on the earth’s surface.

EXAMPLES OF PROJECT INTEGRATION

-Documenting/creating a project Charter-Knowing the project scope of the project-knowing the needed deliverables for the project

ROLES OF PROJECT INTEGRATION MANAGEMENT IN A PROJECT- It provides solution to meet changing project needs- Effectively managing resource allocation- Coordinate processes to accomplish the projectobjectives in a methodological way

project integration management comprises of these:

A. Project plan development: This means coordinating allproject plans to create a consistent document. It is alsoa written document where you put all the information aboutyour project so as to let everyone who is involved in theproject to know what needs to happen if the work is done.

Input required for the project plan development. To develop the project management plan, these inputsare required:I. Project charterII. Output from the planning processIII.Environmental factorsIV. Organizational factors

Definition of terms:i. Project charter is an official document

drafted for the purpose of the project workrecognizing that the project exist, thisdocument carries the name of the projectmanager, responsibilities and duties of thePM, scope of the project. The charter isdrafted or written by the projectowner/sponsor, i once it is accepted mean theproject has been accepted.

ii. Output from the planning process is theresult gotten after the planning process.

iii.Environmental factor are factors which arelikely to affect the project positively ornegatively. For example: in a constructioncompany like SAGETO Construction company,building a multi-phase building project goingon along ministry of finance, CentralBusiness District Abuja Nigeria, if the landallocated for the project is going was mappedby the government either for express road orfor other specific infrastructure, then that

project would be a wasted one because it willcertainly be dualized by the governmentirrespective of the owner or sponsor.

As such environmental factors include;i. Government Standard ii. Marketplace conditionsiii.Infrastructural facilities

B. Project plan execution: It is carrying out the projectplan according to the strategy as per the plan mapped for the project.C. Integrated change control: It is coordinating andhandling changes during the project plan management where and when necessary.

Note: Change request is a formal /official documentcontaining the description of change required by projectsponsors/owners.

PROJECT CHANGE REQUEST FORMProject Name:Project No:Request No:Date:Change requested by:Proposed change short name:]

Description: (Attached if necessary)Change is: External to scopeSignature:

APPROVED FOR EVALUATION DATEPriority:Project Manager: [ ] yes [ ] No Signature:Sponsor: [ ] yes [ ] No

Signature:

ESTIMATED PROJECT IMPACTCost:

Schedule:Cost Benefit:

Apart from all the sub categories of projectmanagement plan inputs which are these1.Project Charter2.Outputs from planning process3.Environment factors 4.Organizational process assets

The most important of all is drawing up a projectcharter because there lies your project informationwithout it you may not know what to do in a project asa Project manager.

The core categories of project integration managementcomprises of these

A. Project Plan DevelopmentB. Project Plan ExecutionC. Integrated Change ControlWhen we talk about plan, it is a scheme or programprepared beforehand ahead of time to be a guide toaccomplish an activity or an objective.Main purpose of project plan development is to guidethe execution document assumptions planning decision.

KEY REASONS WHY PROJECTS FAIL1. Misused methods: It is advisable to contract aconstruction company or agent and professionals to handle the project, butwhen a project manager contracts less skilled labourer’s to do the job, nomatter the number of the labourer’s, because they are less trained in thatfield, they must miss one or more steps and get the job messed up. So it is in asoftware/IT company when

the right method is not applied the project may fail,it may be as a result of misconnection or something else. When a scientificmethod is required, and a project manager uses a manual method thereby costingthe project sponsor and himself the risk of a failed project.2. Inadequate/Inexperience Trained Project Manager: This is when a project manager makes a fake PMPcertificate to be awarded a project and it is advisable to request a track recordof what a PM had done previously in the past. 3. Inadequate communication especially progress tracking andreport: This is when there is no efficient and effectivecommunication with everyone involved in the project.

Communication usually Involve:1. Project manager2.Project owner/sponsor3.Project stakeholder(s)

A good communication plan includes the following:1. Communication method flow2.Target audience3.Communication objectives4.Content of the communication

Importance of communication in project integrationmanagement

1. It reveals misallocation of resources early topermit correction

2. It is a key to the success of the project3. It prevents duplication of effort4. Good communication forestalls surprises.

Note: It is advisable for a Project Manager toalways communicate the project sponsor and project

stakeholders of how far the project he is managinghad gone. At each stage or phase, the projectmanager should be able to always communicate theproject sponsor or stakeholder(s) of how far theproject is gone. From communication you can be ableto know the changes they need to make in theproject.

4. Poor leadership at all level: This is when a projectmanager does not coordinate his team members, as a team lead it is hisduty to adequately manage portfolios of his team members to assign themto different task and listen to their own opinions and ideas so as to beable to tackle all aspect of the project work.5. Failure to adequately identify & document: It is theduty of the project manager to identify what deliverables and scope forthe project work and also perform quality control measures to identify thedurability of a product. A project manager must learn to identify the stakeholderinvolved in the project work and also the deliverables, identify the risk thatmay occur and document them for, record purposes for another PM who may needit as a reference. For instance in a construction company, you mustidentify the construction company to be used for a particular project or an oilservicing company you are contract as a vendor must identify the scope of theproject work. It is the information

you provide the construction company or the oilservicing company that will determine the end product of the project work. In documentation the project manager must alwaysdocument every project agreement and other documentable to avoid future blameand so as to be on a safe side.6. Poor plans and planning process: When a project managerdoes not plan, then he plans to fail. According to PMBOK edition, there arefive process groups and their members.

Initiation Process Planning Process Execution Process Monitoring and Controlling Process Closing project/Closing procurement Process

7. Misalignment between project team and other business itserves: A project work may not be completed as estimated for the time periodexpected as some team members already have divided attention with otherbusinesses or organization they are engaged in.8. Poor effort: A project manager needs to add extraeffort to see that the project work meets the need and possibly exceeds the expectationsof his clients.

Good things about project planningThe good things about project planning do not just happenlike that, also bad things can as well happen. To gain

success in a project work and get over on time and withinbudget;

The project planning steps needs to be planned well beforethe commencement

of the project Who will do What And When, should be decided well in advance before the commencement of the

project

Successful questions and answers of project team membersQ1. Do they know what is expected of them?Ans: Equip materials, equipments, skills, knowledge

to the team to do their work properly.

Q2. Do I have the material and equipment Ineed to do my work right? Ans: Ensure that the work assigned to a teammember matches the members

liking and skills set.

Q3. Do I have the opportunity to do what I dobest every day? Ans: Ensure better communication within the team sothat good work can

get the recognition it deserves Q4. Are my co-workers committed to doing qualitywork? Ans: Create an environment of trust between you andyour co-workers

Q5. Does my opinion count at work? Ans: Make sure that the road-map is clear to all

Q6. Does my project charter feel my job isimportant to him?

Ans: Equip personal excellence along with teammembers excellence

Q7. Has anyone talked to me about my progress? Ans: Then ensure that every one advances in theircareer

A project plan contains the following: WBS – Work breakdown structure- this is to thelevel of control, also a person of sub categorizing project work into smallerand manageable and understandable components. Major milestone Responsibilities / duty chat resource Change control plan Baseline management plan (scope, schedule,quality, staffing, communication, procurement, scopemanagement, schedule management plan), HR policy, riskresponse plan.

Note: that a baseline is required to track the progressof the project from the approval plan.

General skills required to execute project planeexecution

There are two things required to execute a project; Management skills

Management - planning, organizing, controllingpeople, time management

Skills – written, official communication, productmanagement skills

Note: it is not possible to manage a project without thebasic technical knowledge about the project knowledge …it does not require extensive technical knowledge, it

means minimum technical which will give you an edge inthe project discussion and decisions in a meaningfulway.

Types of construction projects

Construction project is a process that consist thebuilding or assembling of infrastructure.Again it is bring all materials and work necessary for the

construction of a finished structure for occupancy by end customers. This includes -Site preparation foundation, mechanical and electricalwork and other works to complete the project.

There are different types of construction project, theyinclude:

1 Industrial Construction: This is a smaller part of the whole construction company but it is a very essential part of the construction company, this kind of industry is commonly owned by profit making industrial corporations e.g. Power generation, petroleum, manufacturing etc.

2 Residential Construction: As the name sound e.g. houses,apartments, single units, cottages, condominiums, beforea construction is made, it must be first designed by an architect and engineers before the construction project is executed by contractors, who then hire sub contractors for other specialty work e.g. electrical, mechanical, structural works. Residential construction is highly market competitive.

3 Building Construction: This type of construct5ion is widely the most common or popular type of construction project, it is usually an issue of room addition and making small renovation. They are usually characterized by “A walking in access” mainly serve the purpose of

storing equipment and machineries or supplies. The supplies (can be food, can be materials).

Note: there is a difference between Building and Residential construction

Building involves housing equipments and machineries, while

Residential involves living in, personal homes from where you go to church, school, office, game house. Etc.

4 High way Construction: This refers to construction repair and maintenance of highways, streets, parking areas, runways, path, alleys etc.

5 Institutional and Commercial Construction: This is a type of construction that covers large number of construction projects, their sizes are usually massive both in width and in height. E.g. schools and university, hospital and clinics, stadiums, shopping malls, rental chain stores, air ports, bus stations, skyscrapers and towers for office and hotels. This type of construction requires technical and experienced architects and engineers to design a particular building. This has low market competitions because of the high cost and greater sophisticated construction.

6 Heavy Construction: This projects are classified either as building or high way. E.g. Dams, bridges, flood control projects, dredging projects, sewer line projects. Etc.

7 Specialized Industrial Construction: This involves technological complexity. Eg. Oil refineries, chemical processing plants, nuclear power plant. This type of

construction requires very large scale project construction.

Steps in project construction for wall structure Note: In some constructions there are wood and wall constructionsStep I: Site PreparationStep II: Contract ContractorsStep III: Make / dig foundation (monitor and control)Step IV: Raise the structure (monitor and control)Step V: Zinc the structure or shelter enclosure (monitor and control)Step VI: Plaster the structure (monitor and control)Step VII: Paint the structure (inside and outside) (monitor and control)Step VIII: Furnish & design

Note: If there is any other element outside the main structure / building you need to create e.g. parking space, garden, smaller quarter’s extension, gate keeper’s house, play ground etc, it is managerially advisable to ask the architect to add it in the drawing or plan of the structure, before the main structure is executed. If not done so, it will attract space-less environment which u will in turn hate. You may decide ton build either one first, but it is structurally advisable to construct the main structure first, because most times uncertainty may rise and the scope of the project might change and the construction will extend and occupy the mapped area.

Methodology of construction project

S/N

Project Types Financial costIn percent %

Market Competition in percent %

1. Residential Houses, 70% 60%

construction apartments, single units,condominiums,town houses

2. Building construction

Storing equipments, machineries

50% 50%

3. Industrial &commercial construction

Stadium, schools & universities,hospitals andclinics, warehouses, shopping centers, recreation centers (massive).

80.5% 50%

4. Industrial construction

Power generation, manufacturing, petroleum stations

90% 50%

5. Specialized industrial construction

Chemical processing plant, nuclear powerplant, refineries, still mills

90% 50%

6.

Highway construction

Highway roads, streets, alleys, run ways, parkingareas etc

70% 70%

7. Heavy construction

Dams, bridges, flood control

80.5% 50%

projects, sewer line projects etc

Source: Grace F.M, Agbo C.O

Methodology of project types

Major types of projects based on their projects ofproducts

Types of projects Products ofprojects

1. Design / drawing of plan2.Administrative3.Construction4.Equipment or system

installation5.Computer software

development6.Maintenance of processing

industries7.New product development8.Event or relocation9.Research

Architectural or engineering plansInstalling a new system softwareA building or roadA telephone system or IT systemAnew computer programPetro-chemical plant or electric generating stationAnew drug or aero-space or defense productOlympiads or a move into a new buildingA feasibility study or

investigating a chemical

Building an effective project teams membersA project team is a group that works together to execute the tasks necessary to meet customer or client requirements. Before a project team meets for the first time, before they start forming, storming and performing, or maybe even before they know they will be working together, the project manager begins laying the foundationfor effective teamwork.

Create a high-level resource plan : The first step in building an effective project team is to create a resource plan. A resource plan requires you to understand and identify the work to be done and the human resources necessary to complete it. An initial resource plan is often a high-level outline and will be refined as you break down into parts the whole of your work. At the start of a project, the resource plan can merely identify the departments and stakeholder groups that will need to commit resources,and the approximate number of individuals and man-hours that are required.

Get the right people on the team : To develop an effective team, you have to start by choosing the bestpeople for the job. This sounds obvious, but determining the best candidates isn't always straightforward. Many factors concerning potential members have to be considered, including factors like:

The skills required of them to complete project tasks Their level of influence in the organization Their access to a network of other resources Their capacity to participate effectively Their ability to work well in a team environment

Pulling together a group of strong, results-oriented individuals for your project team is part science, part

art. It is important to make sound decisions about who will perform well on your project team and who might be better suited to other opportunities. Project managers must rely on their own and their sponsor's networks and organizational knowledge to make sound choices for the project. Sometimes, project managers don't have the luxuryof choosing team members. Resources may be assigned to theproject team. If this is your situation, it is vital that you take extra care to establish a relationship with your team members before the team begins to meet as a group. Otherwise, they may not feel connected to the rest of the project team or, worse, may feel put upon and lack any commitment to the project.

Part-time project teams members In most cases, the project team is a part-time work team.Team members have other work responsibilities and dedicateonly a portion of their time to your project. They may not

directly report to you, but instead to a functionalmanager in their department. Part-time project teammembers are constantly juggling the demands of their

project managers and functional managers. It is your roleas project manager to work with your team members'

functional managers to prevent conflicts. This agreementmust be

established up-front, before the project team begins its work. While it may feel awkward or overly formal, get commitments from your team members' functional managers inwriting. This won't guarantee that people won't get pulledaway to do other tasks, but at least you'll have a writtendocument to fall back on should it be necessary to hold a manager accountable to the commitment.

Roles and responsibilities of project team members Whether the project team is composed of part-time or full-time members, defining the responsibilities and role of each member type (such as technical lead, business processowner, and subject-matter expert) is critical. As the project manager, you should draft the roles and responsibilities and use these definitions when discussing

resource needs with functional managers. You should also discuss and agree to these definitions with your team members.You can build a foundation for successful performance before the project kickoff meeting by working individually with the team members. Often team members will share different information when talking with you one-on-one than they will in front of a group. You should take advantage of the time before the kickoff meeting to discuss any concerns or assumptions made by individual team members. When work on the project begins, you can continue to build on this foundation by drawing on the relationships you established.

The team operating agreement Part of the role of a project manager is to manage the expectations and assumptions of the project team. This begins with recording assumptions and expectations from the start with agreement from all project team members. Some team members may push to shortcut this process to save time, thinking that the team can figure it out as they go along. However, discussing the rules of engagementup-front will be time well spent when the project team is in the thick of executing the project plan — a time when conflicts are sure to arise.

An effective way for project teams to discuss and establish how they will work together is to use a team operating agreement (TOA). The TOA serves as the guidelines and ground rules to help the team work productively together over the course of the project. It is a living document and may be updated as the need arisesthroughout the course of the project. The TOA can be constructed to include anything that the project team would like to have worked out and documented, and it usually includes:

Team communications How information will be shared Where documents will be stored Confidentiality

Decision-making How the team defines "consensus" How voting is conducted What happens when the team cannot come to an

agreement Meetings

Who will lead meetings How the time will be used Where they will be held and who should attend

Roles and responsibilities What is expected of each team member and each

member's role in the project team Personal courtesies

Mobile device use during meetings Reminders about "over talking" and interrupting

Project team members should draft the (Teams Operating Agreement) TOA together, and it should be signed by all members of the team.

Way of defining project goals and objectives

The objective of the project, what the project will deliver is dictated or stated by the customer. Often, the project sponsor and project manager must work with the customer to define what is expected, what the project willproduce and what the ultimate end result will be like; this will drive the project scope. Note: You should clearly understand the project objective so that you can share it with the team members at the project kickoff meeting.The goals of the project serve to outline how the project objective will be met. Although at first your goals are high level, they are useful in that they form the backboneof the project plan and drive the activities of the project team.

Success checkAsk yourself these questions:

Are the right people on your team? Do you have an agreement from functional managers to dedicate the necessary resources to your project?

Have you set the goals and objective of the team? Are they clear to everyone? Is there commitment from all team members to meet them? Are any goals in conflict with one another?

Are team roles clearly defined and accepted? Does everyone know what is expected of them? Do roles overlap or conflict?

Have you established procedures that team members can follow to work effectively together, such as a team operating agreement?

Are there influences outside the team that may affect performance, and if so, have you identified and addressed them?

Some final considerations regarding the general characteristics of effective project teams:

There is a team identity, or esprit de corps, and a sense of pride. Team members support each other.

There is an emphasis on solving problems rather than figuring out where to lay the blame.

Team members and the project manager understand their roles and are committed to fulfilling them.

Team members are involved in setting expectations. The appropriate skills and levels of authority are

represented on the team. Decisions are made by consensus, and there is a

defined plan for escalation and decision-making if consensus can't be reached.

Team members listen well and participate in discussions.

There is tolerance for conflict, and conflicts are openly and honestly discussed.

By having a resource plan, operating agreement, documentedobjective and goals, and improved team communication strategies, your next project team can be more successful than ever before.

Building a Team and Developing them in a MatrixEnvironment

There are many kinds of teams.  A functional team is a steady team established to conduct operational activities for a particular part of the organization, such as finance, sales, marketing, etc. There is no specified timelimit on functional teams as they are needed to keep the business running.  A project team is brought together for a discrete period of time to achieve a defined goal.  At the end of the project the team is disbanded. Project teams are often matrix in nature, staffed by members takenfrom diverse functional teams in order to achieve the project goal.  When the Project Manager has a high degree of authority this is known as a strong matrix; when Functional Managers have stronger authority this is known as a weak matrix. In all organizational structures, there are many ‘teams within teams’.  For example, if I am the Manager, I might have several teams within my overall team, depicted as follows:

Each circle shows each potentially different team within the overall organization structure. This is complicated enough if the structure is a well-defined functional hierarchy.  However, a matrix environment for completing

projects adds in another layer of complexity.  The functional ‘teams within teams’ still exist and each person has a functional ‘home’ team, but now they also belong to a ‘project’ team which has a finite life span. This extra level complexity can be shown as follows:

Not only do I have the teams that were displayed in the first diagram. I now also have different teams depending on the functional organization in which each person belongs, i.e. their home organization, as depicted by the different colors in the diagram above. All of these teams need nurturing if a project is to be successful. In a matrix environment, allegiance to the project is not created by the structure itself, but rather as a result ofthe relationships that are developed within the project team. Relationships in all teams are important for success, but on matrix teams, particularly weak matrix teams, where the project manager may have little authority, they are especially important.  On such teams, relationships are more difficult to establish, are more fragile, and can be more easily destroyed.  Keeping a diverse group of people together in a matrix team depends on building loyalty and trust.

Phases of project team development

Stage Description

Forming

The team comes together, starts to understand the goals and boundaries,initiates the tasks, but each individual is still working somewhatindependently. Managers need to be directive at this stage in order to steer the team toward the goal.

BrainStorming

Ideas and approaches start to be exchanged about how the work can be accomplished, and this can result inconflict. This phase is critical forthe growth of the team, and results in individuals learning ways to worktogether. Managers still need to be directive at this stage, and also accessible to ensure that conflict is resolved and the team is startingto move forward toward the goal.

Performing

The team is now maturing and often high performing. Work is accomplished, team members know how to work together, and even though conflict takes place it is managed and navigated with skill and can enhance productivity. The team requires very little supervision at this point and can largely make its own decisions.

Methods of achieving project goals and objectives usingproject team members

For a project manager to achieve his desired goal andobjective over a project, certain things need to imply,the team building activities are conducted in order to

develop loyalty and trust which are a critical foundationfor getting the most effective results from a matrix

project team.  Team building is not just about creating‘fun’ events, although that is part of it.  It is also notjust about understanding team members through personalityassessments, although again, that is part of it.  The mosteffective team building involves combining a variety of

tools and techniques.

Start kick off meetings : A new project should be initiated with a kick off meeting so that the purpose of the project, roles and responsibilities and how theproject fits into the organization’s overall goals canbe understood. This technique can be used in all typesof teams, but in a matrix project team that has come together with staff from multiple different sources itis especially important as the team has no establishedcontext for the project.

Have team agreement: Teams that know how to work together are more likely to be effective and efficient.  Establishing agreements can assist in thisprocess.  Collaboratively establishing ground rules for how a team will operate will provide the team withclarity and will ease communication over issues such as boundaries, responsibilities, and team member behavior.  Functional teams already have this established through the use of departmental policies and procedures.  However for newly formed matrix project teams that do not have rules of operation established as part of their formal organization structure, team agreements is a necessary aspect of building an effective team.

Understanding process definition : Understanding how the work is to be accomplished makes it easier for a team to work together.  Functional teams typically

have the process for delivering the work established as part of the departmental rules.  Given that the nature of each project may be different, matrix project teams typically do not have initial stated rules for delivering the work.  For example, if a software development team is unsure which development lifecycle (waterfall, agile, etc) is being followed toachieve the project goal, confusion and a lack of productivity by the team may result. Clearly defining and establishing a process that is understood by all the players in the newly formed matrix team is critical for the success of the project.

Conduct conflict management : A skillful Manager will understand that conflict happens on any team and will take the initiative to establish a clear process for managing it. This provides clarity to the team in the event that conflict does occur.  A newly created matrix project team will find this especially helpful as the team is not used to working together and will need to navigate this as part of the process of maturing as a team. This will also help the team move more quickly through the ‘storming’ phase of group development.

Conduct personal assessment : An effective way to understand the other members of a newly formed matrix project team is through team building sessions using personality assessments.  These can be simple and quick assessments, such as the Personality Profile: The Shapes Test, or more complex assessments, regardless of the specific assessment conducted, the results can bring a team significant value in determining how team members can be best utilized, howthe project manager can best communicate with specificteam members to get the best outcomes, and how people like to be managed to make them efficient and productive.  For matrix project teams, personality assessments can help shorten the process by which the team matures and learns to work together to get the results needed by the project.

Team building event : Group events encourage positive team dynamics to develop and mature. In matrix environments, the development of loyalty and trust is critical to the stability and effectiveness of the matrix structure. Engaging people in activities outside the project allows them to get to know each other in a more relaxed setting and is quite effectivein building team esprit de corps. 

In addition, this allows people to find ways to work together in a non-stressful environment that can then be carried back to the workplace. Some options are:

Conducting social events and participating in a social activity can create a team spirit that encourages people to support each other when theyare at work.

Experimental team building events : Building or creating something outside of the project may engender a camaraderie that can then be carried back to the working day

End of project celebration : To acknowledge the success of the project meeting the goal.

Executive coaching : Individual and group coaching can be an effective tool in all types of organizational structures.  Executive Coaches can facilitate team development, as well as individual leadership development, by focusing on areas such as collaboration skills, negotiation skills, addressing personal or group blind spots, and improving communication. For matrix project teams, Executive Coaches can assist in team building events, as well asfacilitate personality assessments, and help the groupunderstand its own dynamics and assist the team in becoming more effective. Executive Coaches can also help teams and individuals navigate conflict in an emotionally healthy way that allows the team to move quickly through the ‘brain storming’ phase of a

project and onto the next phases, thus becoming more productive more quickly and more efficient.

Regular status updates : There are a variety of ways that status can be gathered and communicated. This is a natural activity in a functional team, as members are typically used to an established status reporting routine and may be more clear on their role in that structure.  For newly formed matrix project teams it is important that team members feel that they belong to the team, and can see how their progress affects the overall progress toward the goal.  Examples: Weekly status meetings One on one sessions Project dashboards Project status reports

Clear Task Assignment : Assigning work that is relevant, achievable and appropriately` challenging for the individual is important in all types of teams.In newly formed matrix project teams it is especially important to make this clear, as clarity is not necessarily provided by the structure itself, as it isin functional teams.  Defining tasks clearly and explaining how team members’ roles in completing project tasks contributes to the success of the project, especially in the early stages of team development, is critical to the effectiveness and productivity of the team.

Recognition and awards : It is always important to recognize people that either go above and beyond, and in matrix project teams this can feel especially rewarding for the team members, if it has taken both the individuals and the team itself some considerable work to get to the point of operating smoothly together to achieve project goals. This can be in the form of a simple thank you, certificates, bonuses, gift cards, etc.

The techniques described above can be used in any type of organizational structure, but are especially important forbuilding loyalty and productivity in matrix teams.  In a functional environment a level of allegiance is created byvirtue of the structure itself, as there is only one focusfor a team member’s loyalty.  In a matrix environment a team member has multiple loyalties and may be more loyal to his or her home team than the project team. In addition, projects often have aggressive deadlines and so it is critical that project teams become efficient, effective, and productive as quickly as possible.

The stages of a project in the upstream Oil & Gas industry

Including four stages described below. Various roles of Geoscientists and Engineers in each

stage. All the stages designed to be Safety and Environment

friendly.

1.Acquisition of oil block2.Exploration and Appraisal 3.Development4.Production

These are the stages involved in the upstream oil and gas projects with critical

definition sourced:

1.Acquisition of oil block : License/Block is an area where a country or a land owner grants the right of exploration and/or production to a company. Following the screening of areas for the potential of hydrocarbon accumulation based on extensive technical evaluations, a company negotiate with a counterpart orsubmit a bid to

acquire the License/Block.

Example of Offshore Blocks

2.Exploration and Appraisal : Exploration means searchinga new hydrocarbon accumulation. Appraisal represents verifying the extension of the newly-found accumulation.

By means of geosciences methods, we make utmost efforts to gather/acquire data and interpret/analyze them. Once the reserves and risks of a prospect pass the decision criteria, we drill an exploration well. Appraisal wells follow a successful exploration well to determine the areal extent and volume of the

A jack-up drilling rig testing formation fluid: crude oil in this case discovery.

3. Development: Development stage sets up production facilities, which comes after successful appraisals confirming economical hydrocarbon volume. After combining the appraisal results to endorse the economical assessments, subsequent to a decision on the development, engineers and geoscientists collaborate to design, construct, install a production facilities and drill, complete a series of production/injection wells.

An offshore production platform under construction.

4. Production: Production recovers hydrocarbon resources to the surface, then transport by pipelines and/or tankersto refineries, where they refine the hydrocarbon and distribute to consumers. In general, production stage runsseveral to several tens of years. Expertise in operation and maintenance of the facilities as well as subsurface situation enable us an efficient production.

An offshore production platform on stream.

Production recovers hydrocarbon resources to the surface, then transport by pipelines and/or tankers to refineries, where they refine the hydrocarbon and distribute to consumers. In general, production stage runs several to several tens of years.Expertise in operation and maintenance of the facilities as well as subsurface situation enable us an efficient production.

Transforming capital project into effectiveness

Managing the complexity of major capital projects in today’s oil and gas landscape has never been more critical. Against the backdrop of a decline in both globaleconomic conditions and corporate revenues, stakeholders are demanding improvedreturn on investment (ROI), reduced risk and exposure and greater transparency. Arguably as important, however, is the focus on managing joint venture relationships and overall project risk as it relates to safety, budget, schedule and reputation. For many years, the leading practice in planning for and executing major capital projects was based on building or spending one’s way into the market. However, given the market environment and the lessons learned associated with the potential setbacks, there is a renewed focus on the complete life cycle of a capital project. That focus enables a holistic approach; one that is more balanced and inclusive of well-planned

handoffs, healthy asset management in the areas of operations and maintenance and balanced project. Tremendous effort, time and resources are expended in delivering a project. However, poor decisions today may result in loss of value tomorrow. Despite a host of research, benchmarks and project guidelines, oil and gas companies continue to struggle with the same complex issues: budgets, schedules and execution. These issues alone, if managed poorly, can be the cause ofdramatic losses in project value and prolonged disputes with vendors. Failure to consider design, construction, commissioning and operational issues during the planning phases of the project reduces the ability to positively affect project performance and value. Companieshave learned the hard way that rushing into the construction phase without adequately developing a plan that considers the entire project life cycle may result inextended schedules, budgets and cost. One of the most proven and effective ways to manage capital projects in the oil and gas industry is to take the holistic approachof a stage-gate model for evaluating progress and enablinginformed decisions about next steps. Looking at the capital project through the lens of one comprehensive lifecycle encourages collaboration across the stages and underpins the processes withthe appropriate systems support. Each stage includes a clear set of deliverables thatwill enable the realization of opportunities and more effective long-term riskmanagement. The best opportunity to make a positive impacton the life cycle ofa major capital project is during early planning, even before the capital outlay occurs.

Capital project lifecycle management for oil and gasThe best opportunity to make a positive impact on the lifecycle of a major capital project is during early planning,even before the capital outlay occurs.

By considering the long-term effect of the entire project during the conceptual and planning stages, project owners can better predict future risks and make decisions that allow them to appropriately allocate risk and control the project’s value chain. The forward-thinking company will spend more time on strategic issues and the strategicdevelopment of a project management approach that aims forthe balance between risk allocation and value retention. Since no one has a crystal ball, what should the company consider? What are the factors in the upstream oil and gasindustry, the marketplace and the business of engineering and construction itself that contribute to successful projects that result in commensurate rewards instead of a project fraught with risk and loss?. The pitfalls between concept and commissioning With the oil and gas industry moving deeper into emerging assets and frontier areas, as well as improved technology plays (such as unconventional), recovering these reserves will require high levels of transparency and investment. Consequently, we are witnessing a ramp-up of mega projects to commercialize these reserves. These mega projects are generally managed via joint venture arrangements between and among national and international oil and gas companies. The combination of leading edge technology, newgeographies, multibillion dollar capital expenditures and multi-party governance means that these projects require high levels of assurance for cost, timeline and risk management. These requirements, together with today’s market and economic factors are giving rise to a range of opportunities that affect short and long-term project performance. This in turn begs the question of why so manyoil companies tend to overlook the impact of capital project life cycle management. However, with challenges also come opportunities. To capitalize on these opportunities, it iscrucial to focus on major project decisions, the scale of the project and the level of investment, all in light of their impact on governance and project support.

Major pitfalls of project in the oil and gas andconstruction companies

The current uncertain economic situation demands a more systematic and risk management approach that makes projectowners and stakeholders keenly aware of the pitfalls up front. Following are some of the most common pitfalls thatarise in the planning and execution of major capital projects:

1. Finance and credit risk: This typically occurs when theproject sponsors don’t take into account the global nature of the business or the current market and credit risks. Problems can also arise if the project portfolio is not diverse enough to handle market shifts or margin volatility.2. Schedule delays: There is an adage that says failing toplan is planning to fail; this describes the typical genesis of schedule delays. Plans often leave out the necessary schedule management elements of schedule development, acceptance, progress measurement and reporting, and relationships to other project management discipline. Note: The best opportunity to make a positive impact on the life cycle of a major capital project is during early planning, even before the capital outlay occurs.3. Inertia and a lack of urgency: Often subject to inertiaand lose the sense of urgency and the focus on completing the project, and maintaining quality. Simply put, when a project becomes a process, it can be problematic. It is important to voice concerns regarding the reliability or accuracy of the current cost and schedule estimates at completion, challenge original assumptions and assess if they are still

valid. 4. Operational impact: Operating and maintenance strategies are rarely planned at the design phase and built into the ongoing project management strategy. Companies are sometimes too quick to segregate duties and may have been imprecise in identifying competency requirements or aligning for a particular project.5. New operational challenges: Companies’ increased focus on exploration & production in deepwater and ultra deepwater areas means more projects in challenging and unfamiliar environments, which can require a new generation of technical and operational solutions.6. Asset integrity: An aging infrastructure can pose serious operational threats to companies and jeopardize their public reputations and business relationships. These structures require continuous inspection, monitoring, maintenance and repair, and may not comply with current environmental standards and regulations.7. Cross-border controls: Projects that involve entities from more than one country carry special considerations, requiring that processesand controls be adaptable to local markets, business customs and international compliance standards. This is one key point in the project life cycle where the relationship between owning risks and reaping reward may diverge.

A closer look at the oil and gas project landscape (By-passing the pitfalls and managing the risk in a large

project)Given the range of disparate factors that comprise the oiland gas landscape and the challenges and pitfalls inherent

in capital projects, is it possible to develop an integrated project team approach that can help these projects succeed? The short answer is yes, as long as the framework of the deal and the framework forproject management are part of the process from the beginning. The enemies of a successful project can be costly: excessive unplanned downtime, lack of project controls, missed milestones and overall operational underperformance. If a capital project is to survive — or,better yet, prevent — the impact of these, it must begrounded in an integrated process with critical success factors built into the DNA of the project management plan.Simply put, in order to move toward success, a risk planning process must be implemented as part of the strategic development of the oil and gas industries. In order for the capital project to succeed at each stage gate in the supply chain. Creating value throughout will improve ROI, strengthen the relationship between the owner and engineering and construction companies, and help drive a proper balance between owning the risk and reaping the rewards.

Oil and gas capital project value driver_ Effective project management_ Regional execution_ Effective project management_ Total cost of ownership_ Governance, controls, policies and procedures_ Healthy stage gates_ Supplier performance management_ Effective contract management_ Cost management_ Handover management_ Risk assessment and reduction_ Safety_ Portfolio management_ Operating model design

_ Operating model design_Upgrade existing facilities, development with technology providers

A closer look at the major areas of effective capital project life cycle managementSince the beginning of the upturn, oil and gas companies are demonstrating an increased focus on the entire life cycle of a project, including a deeper commitment to beginning the planning process earlier and ensuring that the quality of the execution is held to a higher standard relative to cost, schedule and execution. These are some of the capabilities that, when executed well, can prove tobe game changers on large capital projects:

1. Effective project management: Make sure the plan includes appropriate focus on safety, costs and schedule —attributes that need not be mutually exclusive. All parties involved should be in alignment with the baseline schedule and must understand the project’s critical path. Critical milestones play a major role in maintaining momentum; developing a continuum of optimistic, realistic and pessimistic potential completion dates based on actualprogress can help maintain focus on the project.

2. Cost management and cost reduction: The best strategy is to develop an integrated cost management function that aligns all cost-related processes and functions and incorporates data developed or maintained in other processes. Emphasis should be placed on budget control, approved corporate budget changes and project management internal budget transfers. Expenditure tracking should include actual cost to date, accruals and total cost incurred. Look for cost reduction opportunities, along with

opportunities to reduce planning budgets, engineering hours and cycle time, at every stage of the life cycle. Pay particular attention to the larger line items in the

construction budget and operate with a mentality that helps promote accountability.

3. Supplier performance management: An improved approach to risk and exposure on costs and delivery and improved management of stakeholders and suppliers can help optimizethird-party performance and keep relationships with stakeholders on an even keel. It is important to analyze the contractor’s baseline as-planned schedule and its costloading, including the complete scope of work, and to identify the contractor’s for critical and near-critical activities.

4. Healthy stage gates: Develop a holistic capital projects program with a stage-gate model for evaluating progress and enabling informed decisions about next steps.In addition to minimizing rework on front-end engineering and design, improving cycle time and generating punch lists for handoff maintenance, this disciplined decision making framework is designed to move projects through the development pipeline to facilitate more effective planningand evaluation of projects, which will translate into better capital effectiveness. Early involvement in the process from all disciplines and cross-functional participation throughout the development process will result in better integration and alignment ofactivities.

5. Risk assessment and reduction: To help ensure a satisfactory degree of success,project teams must control costs, ensure quality delivery,meet deadlines and identifymajor challenge. The capital project team is often too close to the day-to-day activitiesto be able to take an objective view of performance. Consequently, shortcomings areoften recognized too late, by which time overall objectives in terms of cost and quality

are jeopardized or schedules slip, affecting both businessstrategy and operations. Thisis when projects can erode, rather than support, the creation of business value.

6. Safety: Safety risks evolve throughout the capital project life cycle, so those risks must be considered at each stage of development. Engineering and procurement personnel must make decisions that allow for the safe construction of the project as well as its safe operation.Construction and operations personnel must be trained properly, comply with safety regulations and processes andutilize the safety controls provided. Equipment or controlfailure could impact personal safety as well as hinder theoperations of a facility. An approach to safety on all these fronts needs to be an integral and proactive component of ongoing project management, notjust an emergency response.

6.Handover management: To avoid the impact of poor handover management, operating teams must be mobilizedat the right time and given ample opportunity to work with the project team at appropriate stages in the project life cycle. Likewise, equipment needs to be easily serviceable and maximize commonality wherever possible, with bills of materials, and operating and maintenance instructions accurately captured and readily accessible.

8. Regional execution: Integrated oil companies and national oil companies are increasingly investing in new projects through joint venture arrangements, with the national oil companies offering more concession agreementsto the integrated oil companies for the rights to their reserves. These agreements are perfectcandidates for comprehensive risk reviews. The integrated oil companies need the growth to offset stagnant home territories, while the national oil companies need to

generate more income for their burgeoning populations and budgets while diversifyingtheir economies.

9. Total cost of ownership: The total cost of ownership (TCO) for a capital project includes the total of all costs to design, purchase, construct and operate. Most of the costs for these elements can be internal or indirect costs paid to external parties.

10. Governance, controls, policies and procedures: Corporate boards, joint venture partners and other stakeholders expect their capital projects to be run with a governance model that enables transparency and reliable reporting. Ownersmust insist on the same. Processes and procedures must be proactively enforced by monitoring, detecting, preventing risk. Systems must be able to identify and manage current risks and evaluate current performance, including the appropriate use ofresources.

11. Operating model design: Many different internal and external factors drive businesses to undertake organization redesign. The impact of their decisions can be both positive and lead to outstanding growth, or negative and lead to a further needto restructure. There is no single solution when designingan organization; a one-off solution is required in every instance. Numerous interdependencies need to be considered, including how affected stakeholders will be engaged and consultedduring the process.

12. Contracting strategy: Contracting strategy goes beyondthe pricing arrangement decision; it includes decisions about if and how to compete the work, how to segregate theproject scope, and how to allocate the risks and rewards of performance.

An upstream capital project is a complex set of engineeredfacilities, systems and subsystems.Note: The holistic approach to managing capital projects is proving to be one of the most effective ingredients to a successful project. While engineering and construction professionals often focus publicly on the positive lessonslearned, and privately on the negative ones. Ernst & Younghas found that the most effective deterrents toproject failure are based on a company’s ability to structure a capital program that not only encourages, but depends on collaboration across the functions, business units and stage-gates. We are seeing healthy stage-gate approaches that are embedded and supported internally, while driving transparency and collaboration externallywith joint venture partners, local governments and contractors. Finding the balance between and among the interests of these stakeholders and the interests of the project is the most effective strategy for transforming project effectiveness.

Capital project questions1. Is your capital projects program holistic, with a stage-gate approach?2. Does your project have management or committee steering the project with you?3. Does your approach realistically match your organization’s capabilities?4. Is your capital project structured to balance the needs of various stakeholders?5. How will you measure and track progress?6. Do you have a plan for optimizing the performance of your suppliers?7. Do you have a realistic budget that factors in historical success rates in meeting projected scope, schedule and quality goals?8. Are policies and procedures in place to manage and mitigate project risk?

With some perspectives in mind, the followings have been designed in the major capital projects area:

1. Capital project risk assessmentMajor capital project risk assessment offers the greatest ability to positively affect the full life cycle management of a project. Risk assessment efforts should focus on the issues with the greatest potential to impact objectives. Strategic risks include environmental considerations, investment and resource allocations and market dynamics. Operational risks include supply chain, individual performance of team members, contracts, information technology (IT), safety and physical assets. Financial risks include: market conditions, liquidity and credit, accounting and reporting, international currency.capital project risk and control services provide a structured review of the overallstrategy, planning, procurement, design, implementation and completion of capitalprojects. The aim is to highlight performance weaknesses and determine future areas of overall project performance.

2. Project contract management'The parties’ share of the project risks. In recent years,contractors and project owners have developed new, innovative and complex approaches to contract structure, pricing arrangements and risk allocations, which have included such elements as alliance agreements, incentive fees and hybrid pricing arrangements.Depending on the relative sophistication of the contracting parties, their familiarity with the nuances ofthe contracting strategy, understanding of the associated risk allocation, and organizational capabilities to mitigate those risks, each may be inadvertently accepting more risk or risk that is different from what was originally planned.

3. Supplier performance management

Oil and gas companies have been using suppliers to carry out a large part of their required project. Oil and gas clients address this situation by assisting them in adopting a more holistic view of supplier performance management. Within our Advisory capabilities, we combine our competencies in a way that provides a tailored solution to

address this client need, encompassing the areas of enterprise risk management, procurement transformation, technology enablement and contract compliance.

4. Capital project integrated project teamAn increasing focus on capital life cycle management is beginning to emerge, putting more emphasis on the front-end planning for the larger program management effort. Themanagement team typically tasked with this effort understands immediately that the project life cycle must be controlled at every level of the organization. Integrated project team (IPT) approach focuses on the functions that are crucial to the capital project that support the planning, development and execution of a portfolio of activities. The IPT creates effective projectoversight and control, minimizes project confusion and promotes greater project success, keeps management well-informed, improves integration of vendor and workgroup activities, builds project management scope. Companies that try to manage projects via uncoordinated, disconnected efforts discover that risks and execution issues ultimately lead to widespread failure.

Following is a more comprehensive list of capital project effectiveness service offerings: l project life cycle management Asset management Supply chain Capital project risk assessment Turnarounds and workouts Capital project integrated project team Cost management and control

Project portfolio strategy Cost allocation Project contract team Change order reviews Operations and maintenance assessment Project cost audits Asset integrity assessment Maintenance readiness assessment Supplier performance management Procurement transformation Supply chain rapid assessment Logistics & network planning Procurement process improvement Sales & operations planning Tax effective supply chain managementC Project contract management Contract risk assessments Negotiation support Compliance monitoring Litigation support and dispute resolution Regulatory support Business process improvement Organizational design Project management oversight Project and process reviews Strategic planning