Page 338 - Hydrocarbon Exploration and Production Second Edition

CHA P T E R 1 3

Project and Contract Management

Introduction and Commercial Application: Large, capital-intensive projects are
characteristic of the oil and gas industry. Planning and controlling a project which
may involve hundreds of personnel, millions of individual items and a significant
investment, has become a discipline in its own right. This section describes how and
why a typical project is organised in a number of well-defined stages, and discusses
the methods used to ensure that cost and time expectations are fulfilled, and
‘products’ delivered to an agreed specification.
Many oil and gas companies use contract staff to perform the part of a project
between preliminary design and commissioning. This is either because they do not
immediately have the staff or the skills to perform these tasks, or it is cheaper
and more efficient to pass the work to a contractor. Contracting out tasks is not
limited to project work, and affects most departments in a company, from the
drilling department through to the catering services. The fraction of a company’s
expenditure directed to contract services may be very significant, especially when
major projects are being performed. Every contract needs to be managed, and this
section outlines some of the reasons for contracting out work and the main types of
contract used in the oil and gas industry.

13.1. Phasing and Organisation

A ‘Project’ can be defined as a task that has to be completed to a defined
specification within an agreed time and for a specific price. Although simple to
define, a large project requires many people bringing different skills to bear, as the
task evolves from conception to completion. Large businesses, including those in
the oil and gas industry, find it more manageable to divide projects into phases,
which reflect changing skill requirements, levels of uncertainty and commitment of
resources.
As mentioned in Section 11.1, Chapter 11, a typical project might be split into
the following phases (Figure 13.1).

Feasibility
Definition and preliminary design
Detailed design
Procurement
Construction
Commissioning
Review.

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