Global experience and statistics demonstrate that just a quarter of oil and gas projects are completed on schedule and within budget (as per Accenture).
Announcements of multibillion refining and petrochemical projects in Central Asia have been all over the news feeds. Projects owners that are committed to success can get around the above unfortunate trend.
The ‘Downstream Caspian and Central Asia’ conference team asked regional industry experts from Kazakh Institute of Oil and Gas (aka KING), Tengizchevroil, SemArco and AVEVA:
What are the conditions for successful project completion?
All the projects are led by people and delivered for people, therefore, the success is based on people and agreement between people prior to initiation of the projects. The challenge is to sell the project with the limited data available at the initiation phase of the project. So, the range of the project cost and schedule needs to be prepared by project teams, leaders and sponsors and to be understood by project customers. Be careful with optimism bias.
It is important to understand the internal and especially external environment of the projects taking into account all economic, political, technological and industrial changes that the organization leading the projects needs to be prepared for and adapt.
Keep in constant communication with the project sponsors and customers to ensure the project is delivering what is expected and on time to provide the planned benefits to the customer.
Maintain business analysis competency to ensure the right projects are selected from projects portfolio, and the right project requirements are accepted in alignment with corporate strategy and project change management process is to be followed by project leaders.
Statistics can be proven wrong when client and contractor are developing an open and honest relation/collaboration, willing to develop and deliver solutions for a successful project execution and thus a successful completion.
Developing such a relation with one of our international clients in the oil & gas business, during a project workshop organized for this reason, we have commonly identified the following key factors presented below in bullet points for a successful project completion, applicable not only in Central Asia but anywhere in the word.
Establish good communication with continuous flow of information between Client and Contractor with frequent non-formal discussions and engagements, which will enable all topics and issues to be discussed.
The Client need to ensure that expectations are explained clearly and why they are important to him, with clear accountability and responsibility for the implementation and continuous improvement of day to day operations.
Simplify as much as possible all activities, processes and procedures when added value is identified without compromising the values of the parties involved.
Communicate and celebrate more of the successes that are happening across the scope of work. Share what is going well more frequently and ensure that is recognized.
Identify if something in the scope of work is not doable or achievable and see this not as weakness but as an opportunity for all parties to ensure their participation to deliver the expected results.
And finally share the lessons learned frequently and in a timely manner
In my opinion there are two key success factors are a detailed analysis of the project at the initial stage and a well-managed project team which has all needed authorities. Thorough analysis will help to define desirable final goal and identify potential internal and external risks. A skilled and experienced team will allow to complete the projects within reasonable budget and in a timely manner.
I would like to stress importance of providing project team leader with required authorities. In my experience there have been a lot of cases when an experienced project lead had to be postponed for weeks before approving a simplest request. This sort of matters affects overall project schedule causing delays.
Based on all mentioned I can summarise that the cornerstone of the best results in project management can be achieved by investing in a thorough project preparation and a good reliable project team.
Our experience shows that the following conditions must be met:
Collaborating with Project Owners by Partnership
Engineering services should not be put in a vulnerable position. Project owners in the FSU countries tend to set vague objectives, to change and alter design data, to neglect payment schedules, to impose third-party subcontracting – to name but a few.
Realistic design schedules
Taking too long to prepare for bidding or linkages to particular milestones is quite a common occurrence. As a result, the delivery schedules grow either too tight or outright unrealistic.
Comprehensive project implementation requires relevant experience and detailed plans of all associated activities.
Equipment and staffing requirements in engineering services are growing increasingly stricter day by day. This is a high-tech domain with ever-evolving software and hardware. Chief project engineers and project managers are a must for project delivery. It takes a long time to train and develop this expertise in long-tradition companies.
In keeping with current environment, the leadership of engineering companies must go beyond controlling the delivery to assure a systematic approach, to swiftly identify problem areas, to disseminate best practices, and to plan all necessary resources beforehand.
Any production matter can be successfully resolved by a competent private engineering enterprise, and it is advisable to minimize ‘quasi-state’ companies’ involvement in order to lift constraints to developing a competitive environment in engineering services.
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Project Manager, Tengizchevroil
Member of the Board of Directors, PMI Kazakhstan Chapter
Director, SMP Consulting
Business Development Director