It’s Time to Optimise Oil and Gas Project Management
As oil prices on the open market fluctuate, producers must decide how they will best manage their resources to continue to meet market demand.
When prices are high, approaches like hydraulic fracturing or “fracking,” and oil sands extraction are viable business options. However, when oil supplies are high, driving down the costs on the open market, there’s increasing pressure in the midstream and downstream segments of the industry.
As prices remain relatively low and margins are razor thin, oil and gas refineries must run as efficiently as possible. Factor in the safety and environmental concerns plus the increasing amount of regulation, and there’s virtually no room for error. For these reasons, it’s imperative to have digital solutions to help manage projects in the oil and gas industry, whether those projects are based in the operations and maintenance (O&M), engineering, procurement and construction (EPC) or exploration phases.
While the oil and gas industry is making great strides toward transforming digitally, there’s still a great need to improve abilities to predictably deliver projects, improve communication among project teams and gain a greater understanding of where a project stands at every stage. Having a strong project management software portfolio is essential to achieve these goals, whether you are building a new LNG export facility or taking facilities offline to perform a turnaround.
Some of the key areas where your organisation could benefit the most from digital project management solutions are:
- Document Management
- Project Cost Management
- Field Execution Management
Connecting Documents to Your Team
Because oil and gas projects can have numerous companies involved, scores of team members and thousands of documents, there is a need to streamline the process of capturing, controlling processing and distributing project documentation. When project documents live in a collaborative and controlled environment, we see a greater number of capital projects that are running on time and on budget.
Pardon the pun, but let’s drill down into document management and look at tracking vendor deliverables. Because hundreds of vendors could be involved on any given project, it’s important to manage them efficiently. An EPC contractor must be able to track project documents to make sure things like a piece of machinery or pipe fittings are being delivered on time.
A strong collaborative document management solution allows you to define a required deliverables list and associate that to the item stipulated within the contract. You’re able to track and communicate due dates easily and expedite any contracts of vendors that may be running late or delayed.
It’s also important that your document management system assists in the turnover process. You want to be able to package all relevant turnover documentation and provide it easily to the client.
Taking Control of Oil and Gas Projects
With effective project cost management software, you gain the confidence your job can be done for the budgeted cost. You mitigate risk and provide the best value to stakeholders.
Say, for example, your plant needs to be taken offline. You face a critical path of getting that plant back online in, say, 20 days because you’ve promised delivery of product to customers. There’s a huge amount of revenue waiting for that plant to come back online.
If there are discovery issues that occur during such an event, it is imperative stakeholders know the impact on schedule and cost. Through a project cost management solution, you can easily generate an estimate and tie it to a schedule. You will gain better insight into how much the work is going to cost to get that plant online and how long it will take. In addition, you can leverage benchmarking for increased accuracy. You’ll reduce your risk by validating against past estimates and actual project results.
Waiting for your ERP to generate a report at the close of the month doesn’t give you the immediate snapshot into the progress of your project. That’s why it’s critical to have a solution that gives you real-time feedback. You want to know where you stand before you start the day. If you can execute a certain amount of work and are successful, then you know you’ve met your budget.
Improving Job Site Productivity
By implementing a technology-driven field execution management solution, you are staying on top of the work being performed and gaining a better understanding into the progress of the project. You have better insight into the plan. You know what needs to be done and what’s actually being done.
To complete a project, you need a realistic view of what work needs to be completed. And this means having a simpler, yet effective way of collecting data from the field. A solution with mobile functionality helps capture time and quantities. You end up having a mobile daily planning tool that opens a line of communication between the office and the field.
Let’s go back to the example of getting that plant back online and setting a deadline for that to happen. Daily work can be pre-planned in sufficient detail. This allows project personnel to determine how much work needs to be completed each day for h a specific crew and stay ahead of schedule and under budget.
Organisations that adhere to this approach will see more consistency in meeting deadlines and keeping costs under control. They can see before the day starts what needs to be done to reach their production goals. By implementing a field execution management solution, you simplify the work planning process and improve job site productivity.
If you are thinking of utilising digital tools like the ones mentioned above to manage your capital projects, you’ll be able to:
- Manage and control project documents and connect them to projects and the entire project team
- Generate an estimate and tie it to a schedule, so you’ll have a deep understanding of how much the work is going to cost and how long it will take
- Collect data from the field and see how your project is doing against the original plan
- Plan and budget the work for the entire life cycle and ensure the work makes sense based on historical data
- Gain real-time feedback to see the status of your project
The right project management solutions for your project can minimise risk and improve productivity. The oil and gas industry is facing more regulatory and safety-related work than ever before, and owners are becoming more sophisticated in what they are asking from the contractors. As a result, project teams must become more productive than ever. Now is the perfect time to consider adopting or, in some cases, upgrading your project management software.
About the authors: Rick Deans is an executive vice president at InEight; Daniel Gielb is a product delivery lead at InEight.
With more than 25 years of proven project management software experience, InEight can provide you with the real-time information and insights needed to minimise risks, improve operational efficiency, control project costs, and collaborate easily with all project stakeholders. To see InEight software in action, request a demo.
InEight will be exhibiting at AOG from 13-15 March, 2019. Visit them at stand B10.