Introduction to Project & Interface Management in Deep Offshore Oil & Gas Industry

Public Lecture ISTN 15 June 2013

Antonius Yunianto Offshore Project & Interface Management Professional Offshore-skills.com

1

offshore-skills.com

Agenda 2

I

II

Introduction to Project Interface Management in Oil and Gas Industry

III

Introduction to Project Management in Oil and Gas Industry

IV

Case Study : Concept Selection Phase in Field Offshore Deepwater Development

Project Management Certification

PART I INTRODUCTION TO PROJECT MANAGEMENT IN OIL AND GAS

INDUSTRY

3

I.1 Project Definition 4

Temporary endeavor with a beginning and an end Creates unique product, service or result Is progressively elaborated Distinguishing characteristics of each unique project will be progressively detailed as the project is better understood Progressively means proceeding in steps, continuing steadily by increments, while elaborated means worked out with care and detail, developed thoroughly

Reference : PMBOK

I.1 Project Definition 5

Temporary endeavor with a beginning and an end Creates unique product, service or result Is progressively elaborated Distinguishing characteristics of each unique project will be progressively detailed as the project is better understood Progressively means proceeding in steps, continuing steadily by increments, while elaborated means worked out with care and detail, developed thoroughly

Reference : PMBOK

I.2 Project Attributes 6

A Project : Has a unique purpose Is temporary Is developed using progressive elaboration Requires resources, often from various areas Should have a primary customer or sponsor The project sponsor usually provides the direction and funding the project Involves uncertainty

Reference : PMBOK

I.3 Project vs Operational Work 7

Reference : PMBOK

Projects Operations

To attain its objectives and terminate Create own charter, organization and goals Catalyst for change Unique product or services Heterogeneous teams Start and end dates

To sustain the business Semi permanent charter, organization and goals Maintain status quo Standard product or services Homogenous teams On going

Examples Build LNG Plant Geotechnical Investigation Ground water well construction Opening a new shop Arrange for a conference

Examples LNG Plant Production Writing a progress update memo Attending a conference Meeting with an employee Opening the shop

I.4a Project Management, Program Management & Portfolio Management

8

Ref.: PMBOK

I.4 Project Management, Program Management & Portfolio Management

9

I.5 What is Project Management? 10

Reference : PMBOK

The Application of knowledge, skills, techniques and tools to project activities to meet project requirements. Project management is accomplished through the application and integration of the process such as: 1. Initiating

2. Planning

3. Executing

4. Monitoring and Controlling

5. Closing

I.6 Project Constraint 11

Reference : PMBOK

Scope What work will be done as part of the project? What unique product, service, or result does the customer or sponsor expect from the project as its deliverables?

Cost

What is the cost to complete the project? What is the project budget?

Time

How long it takes to complete the project? What is the project schedule?

I.7 Managing the Project 12

Ref. : PMBOK

Project managers are assigned by the performing organization to achieve the project objectives.

A project manager is in charge of all aspects of the project including, but not limited to: Developing the project management plan and all related component plans, Keeping the project on track in terms of schedule and budget, Identifying, monitoring, and responding to risk, and Providing accurate and timely reporting of project metrics.

The project manager is the lead person responsible for communicating with all stakeholders, particularly the project sponsor, project team, and other key stakeholders.

The project manager occupies the center of the interactions between stakeholders and the project itself.

I.8 Project Life Cycle 13

Reference : PMBOK

I.9 Product vs Project Life Cycle Relationships 14

Reference : PMBOK

I.9 Product vs Project Life Cycle Relationships 15

I.10 Stakeholder 16

Reference : PMBOK

A Stakeholder are individuals and organizations that are actively involved in the Project, or whose interest may be positively or negatively affected as a result of project execution or project completion

External Stakeholders Internal Stakeholders

I.11 Impact of Stakeholder Based on Project Time 17

Reference : PMBOK

I.12 Organizational Structure 18

Reference : PMBOK

Organizational structures range from functional to projectized, with a variety of matrix structures between them

I.13 Functional Organization 19

Reference : PMBOK

Key Points: The organization is grouped by areas of specialization within different functional areas Projects generally occur within a single department Information required from other department will be routed through departmental heads Team members complete project work in addition to normal department work

Advantages: Easier management of specialists Team member reports to only one supervisor Similar resources are centralized, the company is grouped by specialties Clearly defined career paths in areas of work specialization

Disadvantages: People are more emphasis on their functional specialty to the detriment of the project No career path in project management Project Manager has little or no authority

I.14 Projectized Organization 20

Reference : PMBOK

Key Points: The Project Manager has control of projects Personnel are assigned and reports to a Project Manager Team members complete only project work and when it is over they dont have home Communication generally occurs only within project

Advantages: Efficient project organization Loyalty to project More effective communications than functional

Disadvantages: No home when project is completed Lack of professionalism in discipline Duplication of facilities and job functions Less efficient use of resources

I.14 Weak Matrix Organization 21

Reference : PMBOK

Key Points: Team members report to Functional Manager Team members do project work in addition to normal departmental work Power rest with the Functional Manager Project Manager plays a role of: Project Expeditor: Can not make any decision. Staff assistant and Communication Coordinator Project Coordinator: Similar to Project Expeditor except has some power to make decision.

I.15 Balanced Matrix Organization 22

Reference : PMBOK

Key Points: Two Bosses Team members report to Project Manager and Functional Manager Team members do project work in addition to normal departmental work Power is shared between the functional and project manager

I.16 Strong Matrix Organization 23

Reference : PMBOK

Key Point: Power rest with the Project Manager

I.17 Project Management Process 24

Reference : PMBOK

The project processes are performed by the project team and generally fall into one of two major categories: Project management processes ensure the effective flow of the project throughout its existence. These processes encompass the tools and techniques involved in applying the skills and capabilities described in the Knowledge Areas. Product-oriented processes specify and create the projects product. Product-oriented processes are typically defined by the project life cycle (as discussed in Section 1.9) and vary by application area.

I.18 Five Project Management Process Group 25

Reference : PMBOK

The process flow diagram provides an overall summary of the basic flow and interactions among Process Groups and specific stakeholders. A Process Group includes the constituent project management processes that are linked by the respective inputs and outputs where the result or outcome of one process becomes the input to another. The Process Groups are not project phases.

I.19 Project Management Process Groups and Knowledge Areas Mapping

26

Reference : PMBOK

I.20 Team Management 27

I.21 Project Development Management Phase 28

I.22 Earn Value Management

29

Link : EVM

I.23 Oil and Gas Industry Regulation

30

1. PTK-037 POD 2. PTK-038 WP&B 3. PTK-039 AFE 4. All procurement activities are bound by BPMIGAS Regulation on Supply Chain Management for

PSC No. 007-REVISI-2/PTK/I/2011 - Providing guideline on supply chain management, procurement of goods and services, asset management, custom, and project management in BPMIGAS/PSC/JOBTAC. In general, all purchases of goods and services are done by either tender or direct selection/direct appointment (with certain requirements) and with only suppliers which are registered locally. Highlights in the procurement (goods & services) regulation guidelines :

- Tender Plan and Contract Award > $5M needs BPMIGAS approval

Non compliance to the procurement regulation will result to non-cost recovery and may lead to disciplinary action to the PSCs personnel.

Link : POD, WP&B dan AFE http://www.skspmigas-esdm.go.id/

PART II INTRODUCTION TO PROJECT INTERFACE MANAGEMENT

IN OIL AND GAS INDUSTRY

31

II.1 Subsea Interface Management Overview 32

Typical Subsea Interfaces:

II.3 Interface Management Overview 33

Definition of Interface : An interface is the place at which independent systems meet or communicate with each other. It is an interaction of crossproject Delivery Team members necessary to exploit the synergy that is possible by having the right people engaged in communication. This dialogue is focused on ensuring that project identifies and implements the best solutions effectively.

Multidiscipline Communication

Its Colorful

Communication is the key in Project

Execution

II.1 Interface Management Overview 34

Interface Management Plan :

Its builtin & integral part of overall Project Management.

Supports Project Manager for project execution ontime & within budget.

The responsibility is entrusted to Project Interface Engineer.

Is developed for Client, Contractor(s) and subs (suppliers/vendors).

Applicable for project lifecycle : PreFEED/FEED, Detailed Engineering, Procurement,

Construction, Installation (EPCI).

This presentation summarizes the scope of Interface Management, procedure, systems &

processes.

On megaprojects, how it is implemented? Across Continents in different time zones and in

multicultural environments? And, finally the . . . .

Key to successful interface is frequent and effective Communication.\

Is utilized to manage the interfaces between all parties involved during project life cycle.

Is employed to incorporate process, tools and organizational structure.

Later in the project the interface system is developed to incorporate delivery control, status of

equipment, fabrication, installation and finally the management of lesson learned.

II.2 Interface Management vs Project Management Process

35

Interface Management Encompasses Entire Project Process Group :

Interface Management Encompasses Entire Project Phases:

Interface Management Cover s Nine Knowledge Areas

Project Integration Management Project Scope Management Project Time Management Project Cost Management Project Quality Management

Project HR Management Project Communications Management Project Risk Management Project Procure Management

II.3 Interface Categories 36

External Interfaces:

External Interfaces Occur between Contractor & Client and their external org /entities. Outside of the Contractors responsibility (If specified by Client). Cross scope boundaries of two or more Delivery Teams and/or Development Systems, (Ex. PL contractors for Export Lines, etc.) PS : For Client and their sub-contractors these are internal interfaces.

Internal Interfaces:

Internal Interfaces Occur within work areas of Contractors responsibility. Allow flow of information, identify Receiving and Providing Occur between the disciplines, e.g., Engineering, Construction, Quality, Procurement, Project Services, Commissioning, etc. PS : This includes Project Controls, Document Controls and any of Contractors suppliers / vendors.

II.3 Interface Types 37

Interface Types:

Tangible or Hard Interfaces Have a physical connection such as a structural steel connection, pipe termination, or cable connection, Ex. TieIn Points.

Intangible or soft interfaces Involve only the exchange of information such as design criteria, clearance requirements or utility needs between Delivery Teams or between a Delivery Team and an external party.

Technical interfaces Are tangibles or hard interfaces that occur within structures, systems and equipment, Ex. TieIn Points.

Execution interfaces Occur when different contractors conduct their scope of work in series with interfaces that are dependent on each other or simultaneous when concurrent activities impact each other. (Here Construction Manager is in lead).

Organizational Interfaces Result in a significant loss/gain in schedule or capital to the originating Delivery Team or to the project in general.

Critical interfaces Result in a significant loss/gain in schedule or capital, those not performing have potential to negatively impact project performance.

II.5 Interface Management Strategy 38

Interface Management Strategy

Ensures all interfaces between the various parties are identified and controlled to ensure integrity between the different elements associated with the project. Maintains uptodate Interface Registers and forms bridge between various parties involved in the execution of the Project. Defines precisely the interface requirements associated with each party involved in a particular interface. Defines the responsibilities for the parties involved with the interface so that individuals can be assigned and made accountable to followup the required actions. Monitors the transfer of information relating to interfaces between the relevant parties, including Risk Identification & Mitigation Management, and VEP (Value Engineering & Constructability) Programs. Monitors the status of the interface actions to enable active followup if necessary by the Project Management Team, including potential change requests, variation requests, etc. In short, creates an environment to minimize loss of revenue.

PART III

SAMPLE CASE STUDY : CONCEPT SELECTION IN OFFSHORE DEEPWATER FIELD

DEVELOPMENT

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40

40

FPU

Number of Wells & Plateu Rate

Vertical type Cluster type

None Minim.Off. Treatment

Full Off. Treat.

None -Subsea tie-back

SWP FPU SWP

New onshore

plant

TLP

Existing plant

None -Subsea tie-back

SWP

New offshore

Well type

Offshore

processing

Offshore

structure

Final

treatment

location

New onshore

plant

Existing plant

None Minim.Off. Treatment

Full Off. Treat.

New onshore

plant

Existing Plant

New offshore

New onshore

plant

Existing plant

TLP SWP

III.1 Standard Concept Screening Methodology

41

41

III.2 FPU/FPSO vs SWP

42

III.10 Comparison between SWP and FPU/FPSO concepts

Characteristic SWP FPU

Process - NO condensate storage (Layout and safety constraints)

- High capability for condensate storage

Flowline system - Longer infield flowline system

- subsea layout more exposed to geohazards - More complex riser system

Expandability - Larger deck area and load capacity permit easier expansion;

- allows for storage of liquids

HSE - Risks for personnel working offshore for long periods during hook up and commissioning activities (moreover possible SIMOPs)

- Flexible risers and umbilicals not protected from dropped objects

- Flexible risers less protected from ship impact than SWP risers

Subsea system - Complex riser base for export line due to diameter limit on flexible riser (16 ID)

Decommissioning - Requires heavy decommissioning activities - Residual value

Contractual scheme

Schedule - 1000 days

- 800 days

Operability/ piggability

- Pigging of export line requires support vessel and subsea pig launcher because of complex riser base

Constructability - Possible availability of existing FPU for reconversion

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PART IV PROJECT MANAGEMENT CERTIFICATION

43

IV.1 Project Management Professional Certifications 44

Professional Certifications in Project Management

Professional Certifications in Project Management 1. IAMPI (Ikatan Ahli Manajemen Proyek Indonesia) IAMPI website: http://www.iampi.org/ 2. Project Management Institute (PMI)

a. Certifies Associate in Project Management (CAPM) A secondary degree (high school diploma or the global equivalent) AND At least 1,500 hours of project experience OR 23 hours of project management education by the time you sit for the exam.

b. Project Management Professional (PMP)

A secondary degree (high school diploma, associates degree, or the global equivalent) with at least five years of project management experience, with 7,500 hours leading and directing projects and 35 hours of project management education. OR A four-year degree (bachelors degree or the global equivalent) and at least three years of project management experience, with 4,500 hours leading and directing projects and 35 hours of project management education.

PMI website : http://www.pmi.org/ PMI Indonesia Chapter : http://www.pmi-indonesia.org

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Terimakasih Thank You

BACK UP PROCESS GROUP

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I.18-a Initiating Process Group 47

Reference : PMBOK

I.18-b PlanningProcess Group 48

Reference : PMBOK

I.18-c Executing Process Group 49

Reference : PMBOK

I.18-d Monitoring & Controlling Process Group 50

Reference : PMBOK

I.18-e Closing Process Group 51

Reference : PMBOK

BACK UP TATA KELOLA MIGAS

52

IV.3 Upstream Petroleum Arrangement 53

Upstream Petroleum Arrangements

G

B

G B

B B

IV.4 Historical Perspective 54

License/Concession

Production Sharing Contract

1960 -1970

G

B

IV.5 Upstream Petroleum Contract 55

*) Authors illustration - Modified from Society of Petroleum Engineers (SPE)

IV.5 Upstream Petroleum Contract 56

Technical Assistance

Development Field

Conventional E & P

High Cost EOR

Extra Heavy Oil

Extra Deepwater

Low Cost Brownfield

IV.6 The Role of NOC/SOC 57

Service Contract

Production Sharing Contract

Concession Royalty & Tax

Lower Risk

Higher Risk

Percentage of NOC/SOC

Participation?

Iran (Buy back)

Iraq (Technical Service Assistance)

Brazil

Norway

Indonesia Angola Canada (unconv. heavy oil)

Nigeria

Malaysia Libya (EPSA)

Nigeria DW Russia

Algeria

Kazakhstan UK US GOM

57

IV.7 Proven Reserves (By Country) 58

58

IV.7 Proven Reserves (By Country) 59

59

IV.8 Produksi Minyak Bumi dari KKKS 2013 60

60

Chevron Pacific Ind.;

327.692

PERTAMINA, 120,798

Total E&P; 64.788

PHE - ONWJ, 38,178

CNOOC SES, 36,331

ConocoPhillips Ind., 35,146

CICO, 26,910

Mobil Cepu Ltd., 24,083

PetroChina Jabung, 16,345

Vico Ind., 15,236

41 KKKS Lainnya, 120,817

Chevron Pacific Ind.

PERTAMINA

Total E&P

PHE - ONWJ

CNOOC SES

ConocoPhillips Ind.

CICO

Mobil Cepu Ltd.

PetroChina Jabung

Vico Ind.

41 KKKS Lainnya

14,6% 7,8%

Sumber: SKK MIGAS

STATUS 27 JANUARI 2013 (BOPD)

39,7%

IV.9 Profil Produksi Migas Indonesia 61

61

52 57 57 51 53 59 74

91 99 109

153

266

401

488 512

550 544

585

744 773

797

847

904

966

1056

1214

1264

1302 1302 1327

1397 1404

1316

1364

1267

1229

1366

1522 1501

1468 1462

1373 1408

1499

1586

1498 1496

1240

1375

1460

1500 1500

466

569 601

742

853

889

1082

1336

1373

1305

1506

1683

1631

1589 1587

1624

1288

1407

1519

1338 1362

1445

1303

1387

1539 1575

1491

1535

1612 1624

1574 1557

1537

1500

1415

1341

1252

1147

1096 1062

1006

954 977

949 945

902

861 830

900

1000 1010 1010

0

500

1000

1500

2000

1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

MB

OEP

D

TAHUN Minyak

PEAK 1977

Plateau stage

*) Outlook per 29 Januari 2013

PEAK 1995

Sumber: SKK MIGAS

IV.10 Profil Produksi Migas Indonesia 62

62

52 57 57 51 53 59 74

91 99 109

153

266

401

488 512

550 544

585

744 773

797

847

904

966

1056

1214

1264

1302 1302 1327

1397 1404

1316

1364

1267

1229

1366

1522 1501

1468 1462

1373 1408

1499

1586

1498 1496

1240

1375

1460

1500 1500

466

569 601

742

853

889

1082

1336

1373

1305

1506

1683

1631

1589 1587

1624

1288

1407

1519

1338 1362

1445

1303

1387

1539 1575

1491

1535

1612 1624

1574 1557

1537

1500

1415

1341

1252

1147

1096 1062

1006

954 977

949 945

902

861 830

900

1000 1010 1010

0

500

1000

1500

2000

1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

MB

OEP

D

TAHUN Minyak

PEAK 1977

Plateau stage

*) Outlook per 29 Januari 2013

PEAK 1995

Sumber: SKK MIGAS

IV.9 Model 63

63

New Blocks Offered

Existing Contracts

Expiring Contracts

Where do you apply the new model?

64

64

Deepwater Challenges in Indonesia Exploration and Exploitation : subsurface uncertainties, difficulties in seismic, geological modeling, reservoir engineering, reserve calculation Procurement : Scarcity of seismic survey vessels, deepwater drilling rigs Development : Difficulties and uncertainties in development concept selection, design and technological approaches Commercial : Huge capital investment, Economics enhancement target of production Legal : Timing of evaluation and approvals of POD are critical relative to the expiration of the exploration period