Project Management for the Oil and Gas Industry

Project Management for the Oil and Gas Industry: A World System Approach

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Features

  • Discusses how rigorous and disciplined application of project management tools and techniques can help mitigate technical, managerial, and human resources challenges
  • Highlights the importance of project planning, organization, control, and contingencies
  • Examines the four elements of communications management: planning, information distribution, performance reporting, and stakeholder management
  • Covers how to use proactive scheduling to build contingencies into the project schedule, preempting problems and adverse developments
  • Introduces the methodology of incorporating drag and drag cost into the conventional critical path method as a template for scheduling, planning, and control
  • Includes a collection of common tools and techniques for process improvement in project management, with specific focus on oil and gas projects
  • Defines the challenges management must address in quality, scheduling, and cost
  • Presents the basic computational techniques of engineering economic analysis for application to energy economics

Summary

Project management for oil and gas projects comes with a unique set of challenges that include the management of science, technology, and engineering aspects. Underlining the specific issues involved in projects in this field, Project Management for the Oil and Gas Industry: A World System Approach presents step-by-step application of project management techniques. Using the Project Management Body of Knowledge (PMBOK®) framework from the Project Management Institute (PMI) as the platform, the book provides an integrated approach that covers the concepts, tools, and techniques for managing oil and gas projects.

The authors discuss specialized tools such as plan, do, check, act (PDCA); define, measure, analyze, improve, control (DMAIC); suppliers, inputs, process, outputs, customers (SIPOC); design, evaluate, justify, integrate (DEJI); quality function deployment (QFD); affinity diagrams; flowcharts; Pareto charts; and histograms. They also discuss the major activities in oil and gas risk assessment, such as feasibility studies, design, transportation, utility, survey works, construction, permanent structure works, mechanical and electrical installations, and maintenance.

Strongly advocating a world systems approach to managing oil and gas projects and programs, the book covers quantitative and qualitative techniques. It addresses technical and managerial aspects of projects and illustrates the concepts with case examples of applications of project management tools and techniques to real-life project scenarios that can serve as lessons learned for best practices. An in-depth examination of project management for oil and gas projects, the book is a handbook for professionals in the field, a guidebook for technical consultants, and a resource for students.

Table of Contents

World Systems Framework for Oil and Gas Industry
A Multitiered Systems View
Some Case Examples
Energy Costs
Education and Workforce Development Issues
System of Systems Framework
What Is System of Systems?
What Is a Project System?
What Is Systems Engineering?
Embracing Project Management
The Gasoline Pump System
Quantitative Systems Modeling
Cost–Schedule–Quality Constraints
System of Systems Value Modeling
Example of System Value Modeling
Engineering Project Management
Role of Emerging Nations
References

Characteristics of Oil and Gas Projects
Government Involvement
Fate of Refineries
Oil Sands Project
BP to Invest $4 Billion in Gulf of Mexico in 2012
Flak of Fracking
Rules, Laws, Regulations, and Standards
Keystone Oil Pipeline
New Projects, New Project Management Opportunities
Gas Export Project Management
Case Example of Shell’s Use of PMBOK
Hail to Project Management
Project Management Improve Operations
Technology Project Management
Project Management Improves Well Control Events
Oil Bunkering in Developing Nations
References

Project Management Body of Knowledge

Project Management Knowledge Areas
Project Definitions
Project Management System
Project Management Processes
Work Breakdown Structure
Project Integration
Project Sustainability

Oil and Gas Project Communication
Communications Management: Step-by-Step Implementation
Complexity of Multiperson Communication
Using the Triple C Model
Typical Triple C Questions
How to Accomplish Triple C Communication
SMART Communication
How to Achieve Cooperation
Implementing Coordination
Conflict Resolution Using Triple C Approach
References

Critical Path Method for Oil and Gas Projects

Activity Networks
Critical Path Method
The Critical Path
Gantt Charts
Schedule Compression
Program Evaluation and Review Technique
PERT Formulas
PERT Example
Precedence Diagramming Method
Work Rate Analysis
Work Rate Examples
Team Work Rate Analysis
Learning Curve Analysis

The Drag Efficient: The Missing Quantification of Time on the Critical Path

Introduction
Drag and Drag Cost
Impact of Critical Path on Project Investment
Gaps in Traditional Critical Path Data
Computing the Drag Cost of an Activity
Computing the True Cost of an Activity
A Concluding Anecdote
References

Decision Tools for Project Management in the Oil and Gas Industry
Process Operational Definition
Culture and Attitude
Quantifying Operational Efficiency
Project Decision Analysis
Supplier Selection Decision
Wadhwa–Ravindran Supplier Selection Technique
Weighted Objective Method
Goal Programming
Compromise Programming
References

Project Schedule Forecast and Control: Reliable Schedule Forecasting in Federal Design–Build Facility Procurement

Introduction
Case Study Project Descriptions
Research Question and Methods
Analysis and Results
Recommendation
Conclusions
References

Multiattribute Drilling System Selection

Introduction
Green Lake Case Study for System Selection Problems
Sensitivity Analysis for Weight Factors of Each Attribute
Sensitivity Analysis for Uncertainty of Overall Attribute Scores
Discussion
Knapsack Optimization Model
Conclusion
References

Managing Construction Projects in Oil and Gas

Introduction
Shop Drawing and Materials Submittals
References

Engineering Economics for Oil and Gas
Cost Management: Step-by-Step Implementation
Project Portfolio Management
Project Cost Elements
Basic Cash-Flow Analysis
Time Value of Money Calculations
Calculations with Compound Amount Factor
Calculations with Present Value Factor
Calculations with Uniform Series Present Worth Factor
Calculations with Uniform Series Capital Recovery Factor
Calculations with Uniform Series Compound Amount Factor
Calculations with Uniform Series Sinking Fund Factor
Calculations with Capitalized Cost Formula
Arithmetic Gradient Series
Internal Rate of Return
Benefit–Cost Ratio Analysis
Simple Payback Period
Discounted Payback Period
Time Required to Double Investment
Effects of Inflation on Project Costing
Mild Inflation
Moderate Inflation
Severe Inflation
Hyperinflation
Break-Even Analysis
Profit Ratio Analysis
Project Cost Estimation
Optimistic and Pessimistic Cost Estimates
Project Budget Allocation
Top-Down Budgeting
Bottom-Up Budgeting
Budgeting and Risk Allocation for Types of Contract
Cost Monitoring
Project Balance Technique
Cost and Schedule Control Systems Criteria
Elements of Cost Control
Contemporary Earned Value Technique
Activity-Based Costing
Strategic Capital Rationing
General Formulation of Budget Allocation Problem
References

Project Risk Analysis
Definition of Risk
Sources of Project Uncertainty
Impact of Government Regulations
Case Example of Risk Analysis
Risk Analysis by Expected Value Method
Risk Analysis
Expected Value Method for Project Risk Assessment
Risk Severity Analysis Using the Concept of CLF and CIF
Application of Monte Carlo Simulation
Case Research of Spatial Risk Analysis of Oil Refineries within the United States
Abstract
Introduction
Background
Methodology
Conclusion
References
Appendix A: Reservoir Monitoring and Management: A Project Management Approach
Appendix B: Useful Units and Conversion Factors
Index