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Project Management in Oil and Gas Industry

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Innovation and Sustainable Economic Competitive Advantage: From Regional Development to Global Growth

Project Management in Oil and Gas Industry: A Review

a b c d
Harris Abd. Rahman Sabri , Abd. Rahman Abdul Rahim , Wong Kuan Yew and Syuhaida Ismail

UTM RAZAK School of Engineering and Advanced Technology, Universiti Teknologi

Malaysia Kuala Lumpur, Jalan Sultan Yahya Petra, 54100 Kuala Lumpur, Malaysia.
a [email protected], b [email protected], c [email protected],
d [email protected].

Abstract
Oil and gas (O&G) industry contributes to the economic as one of the most important sectors
by taking into advantages as being the most demanding, challenging and exciting engineering and
technological advances which interests the engineers at large. As the O&G industry has become
financially attractive yet risky to be implemented, it is important to look into the effective way
of managing the O&G projects. Hence, via literature review, this paper is emerged with the
aim of reviewing the project management in O&G industry by determining the O&& execution
phase as well as examining the O&G project management approach based on the typical O&G
platform development stage. It is found that in the O&G project execution, a systematic for
project management is developed with the aim to improve the decision making process and
overall project execution, where typically, the systematic project management consist of five
main phases, mainly (1) appraisal; (2) selection and definition, which are both associated with
(3) planning phase; as well as (4) execution and first year operation which are associated with
(5) control phase. The project management approach is also found to be executed in the typical
O&G development stages, namely: (1) conceptual design; (2) Front End Engineering Design
(FEED); (3) procurement of long lead equipment; (4) detailed design; (5) construction/fabrication;
(6) onshore pre-commissioning; (7) transportation/installation (applicable for offshore
platforms); and (8) hook up and commissioning prior to handover to end user. The findings
of this paper is expected to provide a clear picture and understanding on how the O&G project
should be effectively managed via proper approaches of project management.

Keywords: Project Management; Oil and Gas Industry; Review

1.0 INTRODUCTION

Project management is defined by Eduardo and Sergio (2010) as a combination between science,
which follows a systematized process and art which requires creativity to convert human ideas
into actual realities. On the other hand, as defined by PMI (2013), project management is the
application of knowledge, skills, tools and techniques to project activities to meet project
requirement. Project management is accomplished through the application and integration of the
42 logically grouped project management processes (PMI, 2013).

Having conferred the project perspective, oil and gas (O&G) industry mostly involves megaproject.
As defined by Patricia (2011), megaproject is a project which in excess of USD1Billion in capital
expenditure (CAPEX). Nevertheless, for smaller O&G companies, a project with a size of USD100
Million can also be considered as a critical and major project from the company perspective, thus
the needs of project management methodology also require to follow the same structure as defined
in megaproject project management (Mishar and Syahrilyan, 2012).
Hence, by focusing on the project management of O&G industry that is generally
synonymous with the megaprojects, the succeeding subsections discusses the project management
process of the O&G project.

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2.0 OIL AND GAS PROJECT EXECUTION PHASE

According to Oeystein and Dagfinn (1998), a complicated and complex offshore platform
design needs to be fit for purpose. Apart from that, it also an important to design and
construct for optimal design condition, which taking into the consideration of operability and
maintainability.

PMI (2013) has also described the typical example of Predictive Life Cycle for a project which
proceeds through a sequence or overlapping phases that focuses on a subset of project activities.
Further through the literature review, examples of actual oil and gas project execution are shown,
and it can be concluded that there are very much similarities in between.

Various approaches can be seen in oil and gas project execution. For instance, Golfinho Project,
the first offshore deepwater project located in Espirito Santo Basin, Brazil, undertaken by
PETROBRAS, was implemented in a fast track schedule by being able to achieve the first oil
production within eighteen months from the project sanction as described by Ibsen et. Al (2007).
Despite fast tracking schedule, the project was still executed based proper project management
practices and rigid control strategy for the acquisitions. Ibsen et. al (2007) highlighted that the
project follows a methodology which was part of PETROBRAS in-house equivalent to Project
Management Body of Knowledge (PMBOK) recommended practices. This leads to the introduction
of several project execution phase, supplemented with an approval gate at the end of each stages that
has to be approved by PETROBRAS board.

In the oil and gas (O&G) project execution, a systematic for project management is also
developed with the aim to improve the decision making process and overall project
execution. According to Asrilhant (2005), the systematic consists of sets of guideline and
requirement such as (1) focus on value adding opportunity; (2) integration of multi-
functional; (3) promote alignment and communication among decision makers, stakeholders and
project management team; as well as (4) consistently utilize best practices, tools and
procedures.

One of the systematic project management phases as derived by PETROBRAS consists of five
main phases, mainly (1) appraisal; (2) selection and definition, which are both associated with (3)
planning phase; as well as (4) execution and first year operation which are associated with (5) control
phase (Asrilhant, 2005 and Ibsen et.al, 2007).

The systematic project management is a flexible process which varies according to projects size and
complexity, with the aim to stimulate communication, mitigate inconsistencies and reduce re-work
due to errors. It aims at planning and controlling the project execution to ensure it can be done in a
timely manner and cost effective.

However, it was identified that one of the main project challenges during the O&G project
execution phase was the short time to acquire critical supplies, material or equipment (Ibsen et.al,
2007), thus it falls under the project critical path. For the main equipment, the presence and
participation of the project manager as part of the kick off meeting is conducted together with the
presence of the supplier’s high administration (Ibsen et.al, 2007). This is a good opportunity to
highlight the importance of the equipment/material towards the successful implementation of the
project. The important milestone schedule will also be established during the meeting, as this will
assist the project manager to follow up throughout the whole project schedule and able to create a
partnership with the suppliers.

Another important aspect during the O&G project execution is the creation of war room. According
to Ibsen et.al (2007), the war room is basically a place set to conduct meetings between Golfinho
Asset Manager, disciplines coordinator, technical and operation team and also the Project
Management Team (PMT). With all the visualizations set in the room, daily review can be
performed and project progress can be tracked as per daily basis. This is part of the project initiative
to control the project execution.

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Innovation and Sustainable Economic Competitive Advantage: From Regional Development to Global Growth

As part of initiative to explore and develop a new engineering, procurement and construction (EPC)
solution for floating, production, storage and offloading (FPSO) with reduced cost, higher
quality standard and in less time, it was identified that the EPC Project Integration Management
needs to play a major role, and this can be achieved through the utilization of formally recognized
project management standards and processes (Kim et.al, 2008). For this basis, again, the Project
Management Institute (PMI) was chosen as the basis. According to PMI (2013), Project Integration
Management is the activities or processes that is required to identify, define, unify, combine
and coordinate the various processes and project management activities within the Project
Management Process Group, by considering all the ten knowledge areas of Project Management
Book of Knowledge (PMBOK), namely scope management, time management, cost management,
quality management, risk management, procurement management, human resources management,
communication management and stakeholder management.

Gordon (2013) also recognizes that insufficient effort at the beginning of the project, especially
during Front End Loading (FEL), will result in unclear project goals and lack of project definition,
which might lead to a project failure. Hence, appropriate initiatives are essential in ensuring the
success of a particular project. For instance, the application of Stage Gate Project Management
Process (SGPMP), which was originally introduced in North America in the 1980’s is a respond
towards improving the project development time and introduction of new products into the
market (Cooper et.al, 1998). Nowadays, the methodology has been adapted by many oil and gas
(O&G) companies worldwide, with the aim to improvise the decision making process in Project and
Portfolio Management by increasing the project deliverables quality and assisting to manage the
level of uncertainties as described by Eduardo et.al, (2010).

According to Eduardo and Sergio (2010), Walkup Jr. and Ligon (2006) and Mishar and Syahrilyan
(2012), similar methodologies to SGPMP are embraced by most of the world class O&G companies
to manage and control their projects. Generally, the ideas and principles utilized by them are
almost equivalent and overlapped with each other, and the observed difference between the
companies methodologies are considered superficial.

The SGPMP in O&G industries is generally divided into four or five successive stages, where the
first three stages are grouped into the Front End Loading (FEL) (Eduardo and Sergio, 2010).
By implementing SGPMP, the projects have to pass through a particular milestone gate at the
end of each phase in order to move from one stage to the other. The milestone gate can also be called
as Technical Review (TR), which acts as a Quality Control that includes inputs, quality
requirements and outputs the milestone gate also provides the “Traffic Light” decision system
whether to continue to the next stage of the project, to recycle back, or even to cancel or shelve the
whole project.

While selecting the optimum development options during the design, evaluation is the topside or
offshore platform weight itself. According to Alvarado and Wagner (2002), typically the topside
weights are influenced by the following factors: (1) equipment quantity, type and sizes; (2)
piping systems size, schedule, material and routing patterns; (3) system operating conditions,
namely high pressure and/or high temperature; (4) number, type and quantity of effluents and
intermediate products; (5) material quantity and metallurgy selection; (6) control system scope
and sophistication; (7) Health, Safety and Environmental requirement; (8) operating and
maintenance requirements; and (9) crew and operator requirement and accommodations. Directly,
the size and weight of the topsides will definitely co-relate with the overall project cost.

In terms of project and program management, it is recognized by Alvarado and Wagner

(2002) that a new challenge awaits for the Engineering and Construction industry,
particularly on the FPSO and megaprojects in O&G industry. Nevertheless, the same issue applies
for the rest of the O&G industry upstream projects, where more players are introduced into
the markets, including process licensors, speciality fabricators and pre-packaged system vendors
(including gas turbines). It is critical to understand the synergy between all parties during the
interfacing on various project phases, namely planning, engineering, procurement and fabrication.

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Innovation and Sustainable Economic Competitive Advantage: From Regional Development to Global Growth

Inter-relation with the weight of the topsides and also complexity of the design, the impact would
be on the project management, module construction and installation capabilities for most of the
modern present day offshore fabrication yards. In fact, some of the main equipment sizing might be
larger and heavier than conventional one, and that includes the gas turbine generators and gas turbine
compressors set (Alvarado and Wagner, 2002). The inclusion of vendor or third party supplied
equipments, which might come from all over the world with some of the equipments are specially
made by small numbers of manufacturers or technology providers, will result in various
challenges. The project management criticallyrequires an interface management to control the
procurement process/supply from various locations around the globe, hence adding a greater
dependence on the third party service providers/ experts. It is recognized that the complexity
resulted in more sophisticated planning, logistic and material management capabilities to ensure the
successful implementation of the project.

In exploring the varieties of O&G project execution, the process might vary between organizations,
but the actual process are quite similar in nature. Five phases has been identified, namely (1)
conceptual; (2) feasibility; (3) detailed design; (4) material procurement; and (5)
construction/start up. While in terms of project execution approach, Alvarado and Wagner
(2002) also identify the project stages as (1) engineering; (2) material management/logistics; (3)
fabrication, integration; (4) installation and hook up; (5) transportation; (6) commissioning and
start up; and finally (7) operation and maintenance. Besides, as described by Eweje et. al (2012),
most O&G corporations are also following the typical project realization process.

3.0 TYPICAL OIL AND GAS PLATFORM DEVELOPMENT STAGE

In order to execute an oil and gas (O&G) project, a Project Management Team (PMT)
consists of a Project Manager, a Resident Engineer and various disciplines engineers ranging from
Process, Piping, Mechanical, Turbomachinery/Rotating Equipment, Electrical, Instruments,
Electrical and Structural Engineer, will be set up in managing each stage of the development.
Additional PMTs are added according to the needs or criticality of each project stages, such as
Project Engineer, Construction Engineer and also Commissioning Engineer. As explained by
Harris and Abd. Rahman (2014), the typical development stages are indicated as: (1)
conceptual design; (2) Front End Engineering Design (FEED); (3) procurement of long lead
equipment; (4) detailed design; (5) construction/fabrication; (6) onshore pre-commissioning; (7)
transportation/installation (applicable for offshore platforms); and (8) hook up and
commissioning prior to handover to end user, which are deliberately explained in the following
sub-sections.

3.1 Conceptual Design

Conceptual is the initial stage by exploring the concepts of the area development to obtain design
optimisation (Harris and Abd. Rahman, 2014). This stage is one of the activities in the critical path
because it defines whether the project is fit to be developed for the next stage, put on hold, back
to the drawing board or shelved. For example, the conceptual engineering is essential in determining
how the field will be developed in terms of the size of production, basic configuration for the
central processing facilities, numbers of wellhead platforms or subsea application as well as getting
the best cost estimates for the total project development. The conceptual engineering will be studied
either in-house or by design consultant to identify various alternatives solution, and at the same time
to narrow the project scope in selecting the final development option.

According to Prates et. al (2013), the feasibility study is the initial but critical step to evaluate the
project potential whether it can be a success or not. Sometimes, it can also be known as Pre Front
End Engineering Design (Pre-FEED). Key important elements in the feasibility study is to
determine whether the project is able to generate adequate return on investment (ROI), considering
all relevant technology, engineering, economic, legal, logistic and financial aspects. A well-
defined feasibility study shall include project references and historical background, assessment of
the existing market and competitors, a financial model to gauge the potential revenue and

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Innovation and Sustainable Economic Competitive Advantage: From Regional Development to Global Growth

expenditures related to the project, required resources, operation and management, opportunities
and threat faced from the market condition and last but not least the strength and weaknesses of the
proposed project. Since the feasibility study is a very important to support the decision making
process, especially in front end loading (FEL), it is very critical to ensure that the objectivity and
credibility are supported by sound facts and research (Prates et. al, 2013).

Turbomachinery configuration or process selection is amongst the major activities to be carried out
during the conceptual design stage. During this selection, the total number of turbomachinery
required for each facility is decided via process configuration. For example, Project A requires one
Central Processing Platform with Export Compressor Facilities to export the gas from offshore to
onshore facilities. As a part of the conceptual study, this conceptual study will determine what is
the best configuration for the Export Compressor, as typically explained below:

• 2x100% i.e. 1 unit sized for 100% total production with 1 unit as a standby with 100% capacity.
• 3x50% i.e. 2 units sized for 50% each to cover 100% of total production, with 1 unit as a
standby with 50% capacity.
• 2x50% i.e. 2 units sized for 50% each to cover 100% of total production, without any spare
unit.
• 4x33% i.e. 3 units sized for 33.3% each to cover 100% of total production, with 1 unit as
standby with 33.3% capacity.

Option to be chosen for a particular project varies based on the technical requirement of each
project. Amongst the technical requirement are cost, space constraint, overall plant
availability and reliability, as well as the total cost of ownership (TCoO) or Life Cycle Cost (LCC).
The TCoO concept is becoming more popular nowadays, where instead of looking at lower capital
expenditure (CAPEX), the project needs to look beyond by including the operational cost (OPEX)
during the expected life of the field to come out with the overall best solution (Harris and Abd.
Rahman, 2014). Therefore, turbomachinery engineer’s role during the conceptual is vital to ensure
all due diligences have been taken into consideration prior to the concept finalization.

3.2 Front End Engineering Design (FEED)

After conceptual design is the Front End Engineering Design (FEED) stage, which is claimed by
Harris and Abd. Rahman (2014) as aiming at developing more detailed scope of the chosen
development concept, strategizing the overall project execution plan and providing a more refined
cost estimation for the selected development concept. It is substantial that turbomachinery engineer
must come out with a detailed technical specification and datasheet, specifying the requirement for
the equipment requisition during this stage. This specification is usually derived from technical
standards used worldwide, such as American Petroleum Institute (API), American Society of
Mechanical Engineers (ASME) as well as Company Technical Standards. The technical
specification should clearly spell out the project specific requirement (Harris and Abd. Rahman,
2014). For example, Project A is a gas field with high Carbon Dioxide (CO2) content in the process
gas compared to other projects. Therefore, the technical specification should clearly write this to
inform the potential turbomachinery equipment suppliers that material selected should be suitable
for high carbon dioxide (CO2) application.

On the other hand, it is also important that the rotating engineer needs to start engaging with
potential turbomachinery equipment suppliers in obtaining basic technical information of the
equipment and auxiliaries, including the overall dimensions. The initiative by the rotating
engineer is vital for the project to come out with overall platform mechanical layout, which
basically tells where the equipments are to be located, numbers of platform decks, overall
platform size and also weight (Harris and Abd. Rahman, 2014). If the assumption made
during FEED is incorrect especially when the dimension used is smaller than the actual, that spells a
big disaster for the project during the Detailed Design stage, where major changes on the platform
mechanical layout are required.

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Innovation and Sustainable Economic Competitive Advantage: From Regional Development to Global Growth

3.3 Procurement of Long Lead Equipment

Long lead equipment is amongst the critical equipment that takes long time to be delivered to the
site. As claimed by Harris and Abd. Rahman (2014), the delivery may take up more than one year,
hence the procrement of long lead equipment is considered under the critical path in the overall
project schedule. To ensure successful implementation of the project, some critical equipments, such
as turbomachinery, usually falls under the long lead equipment and needs to be purchased upfront
prior to the commencement of the next stage. Depending on the overall project execution plan,
the procurement of long lead equipment can normally start at the end of Front End Engineering
Design (FEED) stage, before the detailed design phase or concurrent with detailed design phase
(Harris and Abd. Rahman, 2014).

In some projects, a pre-screening exercise is conducted prior to the actual procurement. This is
where a high level technical evaluation is performed prior to the actual procurement process.
For example, Project A conceptual and FEED study has already sized the turbomachinery
equipment as 3x50% with a minimum technical requirement of 25,000 kilowatt (kW) of site power
rating for each gas turbine. Based on the pre-screening, not all turbomachinery equipment supplier
has an existing gas turbine model that meets the power rating requirement. The pre-screening is
useful for the Project Management Team (PMT) to reduce the number of potential bidders during
the actual procurement as well as to speed up the evaluation process by having a small number of
bidders. On the other hand, it also allows the PMT to have more time to zoom into more details on
each bidders’ submission.

During the procurement stage, the technical specification obtained from the FEED stage is being
sent to all bidders in order for them to come out with technical bid proposal, which is evaluated in
a strictly manner to ensure compliance with the project technical requirement (Harris and Abd.
Rahman, 2014). The contract award to the successful bidder in supplying the equipment takes
place during the procurement of long lead equipment stage, which usually will be overlapped
with the next project stage: detailed design phase.

During this stage, the rotating engineer usually acts as the package engineer, handling the
turbomachinery equipment vendor and managing the equipment design phase conducted by the
vendor by ensuring the compliance with the project technical specification, and to follow up with
the equipment manufacturing schedule, inspection and testing plan (ITP) (Harris and Abd. Rahman,
2014). On the other hand, Harris and Abd. Rahman (2014) also claim that the rotating engineer will
also involve in critical equipment testing as identified in the ITP to ensure that the equipment
meets the technical criteria as specified in the contract.

As suggested by Phalen and Scotti (2008), early procurement strategy can be one of the key
strategics functions in addressing the market constraint that supports the overall project execution by
identifying the long lead materials and equipment during the design phase. This can also be achieved
by having a close integration between client and the equipment supplier. Suppliers can also become
partners in the design process by having a partnership with key suppliers during the development
stage, as their early presence into the project can inject more predictability into the equipment,
procurement and supply chain. By having the strategic sourcing and supplier integration, it can
also improve the security of critical equipment supply and reducing the overall risk of the project
execution. It was also noted by Harris et. al (2013) that the utilization of Long Term Frame
Agreement to supply critical equipment is identified as a characteristic of successful projects.
This approach was also taken by PETRONAS by undertaking alliance with various
Turbomachinery OEM by signing a long term Global Frame Agreement which indicates a long term
relationship, optimizing project deadlines and cost reduction.

3.4 Detailed Design

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Detailed design phase takes place once the project has been sanctioned to proceed for actual
development, where the deliverables from conceptual and Front End Engineering Design (FEED)
phases will be expanded further for detailed engineering (Harris and Abd. Rahman, 2014). During
this detailed phase, various equipments are also procured concurrently, resulted in choosing
the specific vendor for each equipment. Oeystein and Dagfinn (1998) also highlight the important
of conducting the Material Handling Review. The main objective is to follow the handling routes of
each specific equipment from its location in the platform towards the landing destination or
maintenance area. Material handling report will be utilized as the basis for the Material Handling
Review, and it will also be assisted by drawings and 3D review model.

The review shall be conducted with a team consists of multi-discipline engineers, representatives
from operations and also technical advisors or experts from the end users or design consultant. The
Material Handling Review is usually conducted as a part of FEED and also detailed design phase.
The final outcomes of the material handling are mostly related to surveillance issues in valve
location, instruments location, design of ladders and stairs for accessibility, access requirement
and material handling for maintenance purposes.

Harris and Abd. Rahman (2014) claim that one of the most important activities as a part of detailed
design is Vendor Data Incorporation (VDI), where based on the engineering data provided by
each particular vendor, the data need to be incorporated and integrated with the main platform. For
rotating equipment especially turbomachinery, the VDI activities include the integration between
other disciplines, such as piping tie ins, interconnecting cables, structural support, electrical power
consumption and others. The major deliverable for detailed design phase is to bring the overall
platform design to reach a certain standard or maturity identified as Approved For Construction
(AFC).

According to Kim et.al (2008), it is identified that the challenges faced during the detailed design
phase are also including the requirement for high flexibility of topside system design, vendor data
management and experience level of the detailed design engineering subcontractor/consultant.
Under the vendor data management, based on previous project experience, it was shown that an
ineffective vendor data management will risk the project to a potential engineering delay due to lack
of timely vendor deliverables and design data. Such risk can be mitigated by conducting an early
procurement of long lead equipment such as Compressor and Turbine Generator based on FEED
Data and to obtain early affirmation of vendor data as part of Detailed Design Engineering (Kim et.
al, 2008).

3.5 Construction/Fabrication
Platform construction phase takes place once the drawings have reached the Approved For
Construction (AFC) level. Construction phase, or better known as fabrication phase, is the phase
where the actual platform is being built and fabricated at a suitable onshore fabrication yard.
Rotating engineer will involve in the construction planning phase prior to the actual
construction, where the equipment is intalled into its location on the platform deck once the deck is
ready to be used. As part of front end preparation, the rotating engineer needs to ensure that
the equipment seating details are correct as per approved drawing prior to the equipment
installation. If the equipment is categorized under heavy lifting, a proper lifting procedure must be
prepared and approved by relevant parties prior to the actual equipment lifting and installation.
This is to ensure that the equipment installation is being done in a proper manner in avoiding any
potential incident.

After the turbomachinery has been properly installed, Harris and Abd. Rahman (2014) claim that
the next stage shall involve other detailing works, such as equipment leveling, alignment,
interconnecting piping/cables tie-in and installation of auxiliaries equipment, such as Unit
Control Panel (UCP), inlet filter house, exhaust silencer, seal gas condition unit, lubrication oil
console, fuel gas system, rundown tank, shiploosed transmitters and other anciliaries.

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3.6 Onshore Pre-Commissioning

During the onshore pre-commissioning works, there are five critical activities involved in
turbomachinery equipment: (1) lube oil flushing; (2) hook up of shiploosed instruments; (3) Unit
Control Panel (UCP) power up; (4) motor start up test from Motor Control Centre (MCC); and (5)
Gas Turbine Dry Crank test. Ultimately, if the onshore pre-commissioning works are able to
achieve dry crank at the fabrication yard, this is a big achievement to indicate that the
turbomachinery has been successfully installed and able to link to the Unit Control Panel (UCP)
(Harris and Abd. Rahman, 2014).

It is also noteworthy to highlight that not all projects are able to achieve the dry crank stage as
these are all depending on project sequence, schedule and priority. Harris and Abd. Rahman
(2014) define dry crank as the ablility to start the gas turbine using the UCP by utilizing the motor
starter or hydraulic starter up to the turbine crank speed, where due to unavailability of fuel gas
at the onshore fabrication yard, the gas turbine will be shutdown safely, indicating that the dry crank
has been achieved.

3.7 Transportation/Installation (Applicable for Offshore Platforms)

The platform will be then transported to the offshore location by using a barge or installation barge
once the platform fabrication has been completed at the fabrication yard. Prior to this, rotating
engineer needs to ensure that the turbomachinery equipment has been preserved according to
vendor recommended practice and standard. Harris and Abd. Rahman (2014) also claim that once
it has reached the site, the platform installation will be conducted accordingly via an installation
barge.

3.8 Hook Up and Commissioning prior to Handover to End User

The hook up activities is defined by Harris and Abd. Rahman (2014) as the shiploosed items which
could not be installed due to safety reason and to avoid damages during the transportation of the
platform from the fabrication yard to offshore. The shiploosed items can be ranged from pipings,
cables and structural components as well. The amount of hook up works depends on the design and
construction of the platform.

Finally, the project is getting ready for the commissioning stage. Usually, the one that will be given
priority for commissioning should be the utilities, such as power generation, water and safety
devices because all of these utilities ensure that the platform is ready for habitation by personnel.
Once the utilities is in place, the project should gear up for process related commissioning,
including the turbomachinery equipment (Harris and Abd. Rahman, 2014). Once the hydrocarbon is
introduced into the system, the turbomachinery is required to be put under continuous endurance test
for 72 hours prior to handover to end user or operation team.

Due to the ever increasing growth in the industry, Phalen and Scotti (2008) have identified few
common problems during the hook up and commissioning stage, namely: (1) acute shortage in the
human resources in engineering and managing the oil and gas facilities; (2) rising cost for the base
material and essential materials; (3) capacity constraint in equipment and material manufacturing; as
well as (4) declining pool of skilled construction labour.

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4.0 CONCLUSION
Oil and gas (O&G) industry plays a very important part as the nation building, despite the fact that
each of its facility is having a unique requirement. As millions of money are needed to jump start
an O&G project, appropriate initiatives are apparently essential in ensuring the success of a
particular project. Effective project management approach is seemed as one of the best solutions to
this dilemma. It can be seen that the relevancy of having a structured project management approach
and guidance such as Project Management Book of Knowledge (PMBOK) and Stage Gate Project
Management Process (SGPMP) shall be the way forward for future project implementation. The
implementation can be also tailored made according to each local country requirement and business, where
the upstream and downstream O&G projects might have some differences in terms of approval authority
and project stages. Hence, as this paper has successfully achieved its aim of reviewing the project
management of O&G industry, further study is expected to be carried out in investigating the
specific critical success factors that ensure the success delivery of O&G project worldwide.

REFERENCES
A. Prates, F.E.A. Freigedo and P.O. Almeida, A Critical Assessment of the Main Challenges
Related to Feasibility Studies, Risk Analysis and Monitoring of Current Offshore Projects in Brazil,
Offshore Technology Conference, OTC 24421, Rio De Janeiro, Brazil, 29-31 Oct 2013.

A.R.S. Harris and A.R. Abd. Rahman, Turbomachinery in Oil and Gas Facilities Project:
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