5/28/2019 Project Management in the Oil and Gas Industry | Energy Economics & Policy | General Energy | Subjects

General Energy | Subjects | Wiley

WHO WE SERVE SUBJECTS(/EN-CW/SUBJECTS) THE WILEY NETWORK(HTTPS://WWW.WILEY.COM/NETWORK) ABOUT Curaçao
(/en-cw/)

Enter your search by Title, Author, Keyword or ISBN

Home(/en-cw) / Subjects(/en-cw/Subjects-c-subjects) / General Energy(/en-cw/General+Energy-c-EG00) / Energy Economics & Policy(/en-

Description
cw/General+Energy/Energy+Economics+%26+Policy-c-EG02)
About The Author
Permissions
Project Management in the Oil and Gas Industry
Table Of Contents Selected type: E-Book
Mohamed A. El-Reedy(/en-cw/search?pq=%7Crelevance%7Cauthor%3AMohamed+A.+El-Reedy)
ISBN: 978-1-119-08410-5 | February 2016 | 336 Pages Product not available for
purchase
(/en- (/en-
E- HARDCOVER cw/Project+Management+in+the+Oil+and+Gas+Industry-
cw/Project+Management+in+the+Oil+and+Gas+Industry-
BOOK p-9781119084105) p-9781119083610)

DESCRIPTION

Oil and gas projects have special characteristics that need a di erent technique in project management.
The development of any country depends on the development of the energy reserve through investing
in oil and gas projects through onshore and o shore exploration, drilling, and increasing facility
capacities. Therefore, these projects need a sort of management match with their characteristics, and
project management is the main tool to achieving a successful project.

Written by a veteran project manager who has specialized in oil and gas projects for years, this book
focuses on using practical tools and methods that are widely and successfully used in project
management for oil and gas projects.  Most engineers study all subjects, but focus on project
management in housing projects, administration projects, and commercial buildings or other similar
projects. However, oil and gas projects have their own requirements and characteristics...

READ MORE

ABOUT THE AUTHOR PERMISSIONS

Mohamed El-Reedy has over 20 years of experience working on oil and gas projects and electric power Request
projects, working with BP, Apachi, Amoco, Saipem, Agip. He has worked as a chief engineer with Worley permission(https://s100.copyright.com/AppDispatchS
Parsons in Egypt, and has published many papers in international conferences sponsored by API, ASME, publisherName=wiley&publication=Book&title=Projec
ASCE, ACI. He has taught numerous courses in construction management and project management Management in the Oil and Gas
throughout the Middle East,?Malaysia and Singapore, and he has published 3 books with CRC Press and Industry&bookTitle=Project
4 books in Arabic. Management in the Oil and Gas
Industry&publicationDate=FEB+2016&author=Moham
A.+El-
Reedy&sc=US&numPages=0&copyright=&contentID=9
1-119-08361-
0&orderBeanReset=True) to reuse
content from this site

TABLE OF CONTENTS

Preface xv

About the Author xvii

1 How to Manage Oil and Gas Projects 1

1.1 The Principal of Project Management 1

1.2 Project Characteristics 2

1.3 Project Life Cycle 5

1.3.1 Initiation of the Project 7

1.3.1.1 Getting to the Scope Baseline 9

1.3.2 Feasibility Study 10

1.3.3 FEED (Preliminary) Engineering 11

1.3.4 Detail Engineering 15

1.3.5 Decision Support Package 17

1.3.6 Design Management 19

1.3.7 Execution Phase 20

https://www.wiley.com/en-cw/Project+Management+in+the+Oil+and+Gas+Industry-p-9781119084105 1/6
 5/28/2019 Project
1.3.8 Management
Commissioning in the
and Startup 21 Oil and Gas Industry | Energy Economics & Policy | General Energy | Subjects | Wiley
WHO WE SERVE SUBJECTS(/EN-CW/SUBJECTS) THE WILEY NETWORK(HTTPS://WWW.WILEY.COM/NETWORK) ABOUT Curaçao
(/en-cw/)
1.4 Is this Project Successful? 22

1.4.1 Project Management Goals 22

EnterProject
1.4.1.1 your search by Title,
Integration Author,
Management 23Keyword or ISBN

1.4.1.2 Project Scope Management 23

1.4.1.3 Project Time Management 24

Description
1.4.1.4 Project Cost Management 24
About The Author
1.4.1.5 Project Quality Management 24
Permissions
1.4.1.6 Project Human Resource Management 25
Table Of Contents
1.4.1.7 Project Communications Management 25

1.4.1.8 Project Risk Management 25

1.4.1.9 Project Procurement Management 25

1.5 Project Management Tasks 26

1.5.1 De ne the Project Target 26

1.5.2 De ne the Scope of Work 27

1.5.3 De ne the Time Frame 27

1.5.4 De ne the Available Resources 27

1.5.5 De ne the Cost 28

1.5.6 Evaluate the Master Plan 28

1.5.7 Accept the Master Plan 28

1.5.8 Schedule Follow Up 29

1.5.9 Cost Follow Up 29

1.5.10 Comparing Between Actual Work and Master Plan Cost 29

1.5.11 Performance Evaluation 29

1.6 Project Manager Skill 30

Quiz 31

2 Project Economic Analysis 39

2.1 Introduction 39

2.2 Project Cash Flow 40

2.2.1 Depreciation Methods 43

2.2.1.1 Straight-Line Method 44

2.2.1.2 Declining-Balance Method 45

2.2.1.3 Sum-of-the-Year-Digits 45

2.2.1.4 Sinking-Fund Method 46

2.2.1.5 Service-Out Method 46

2.2.2 Method of Net Present Value (NPV) 47

2.2.2.1 In ation Rate 47

2.2.3 Minimum Internal Rate of Return (MIRR) 48

2.2.4 Payout Method 49

2.3 Economic Risk Assessment 50

2.3.1 Probability Theory 50

2.3.2 Probability Distribution of Variables 55

2.3.2.1 Normal Distribution 55

2.3.2.2 Log Normal Distribution 57

2.3.2.3 Binominal Distribution 60

2.3.2.4 Poisson Distribution 63

2.3.2.5 Exponential Distribution 63

2.3.2.6 Weibull Distribution (Rayleigh Distribution) 63

2.3.2.7 Gamma Distribution 64

2.3.2.8 Logistic Distribution 65

2.3.2.9 Extreme Value (Gumbel Distribution) 66

2.3.2.10 Pareto Distribution 66

2.3.3 Distribution for Uncertainty Parameters 67

2.3.3.1 Triangular Distribution 67

https://www.wiley.com/en-cw/Project+Management+in+the+Oil+and+Gas+Industry-p-9781119084105 2/6
 5/28/2019 Project
2.3.3.2 Management
Uniform Distribution 68in the Oil and Gas Industry | Energy Economics & Policy | General Energy | Subjects | Wiley
WHO WE SERVE SUBJECTS(/EN-CW/SUBJECTS) THE WILEY NETWORK(HTTPS://WWW.WILEY.COM/NETWORK) ABOUT Curaçao
(/en-cw/)
2.3.4 Choose the Appropriate Probability Distribution 69

2.3.4.1 Chai Square Method 70

EnterKolmograv-Smirnov
2.3.4.2 your search by Title, Author, Keyword or ISBN
(K-S) 70

2.4 Decision Tree 71

2.5 Monte-Carlo Simulation Technique 75

Description
2.6 Risk Adjusted Value (RAV) 78
About The Author
3 Pitfalls in Time Schedule Planning 81
Permissions
3.1 Introduction 81
Table Of Contents
3.1.1 Plan Single Point of Accountability (SPA) 84

3.1.2 Starting the Plan 85

3.1.3 Work Breakdown Structure (WBS) 87

3.2 Responsibilities of the Team 90

3.3 Expected Activity Time Period 91

3.4 Calculate the Activity Time Period 93

3.5 Time Schedule Preparation 94

3.5.1 Gantt Chart 95

3.5.2 Arrow Diagram Method (ADM) 95

3.5.3 Precedence Diagram Method (PDM) 96

3.5.4 Critical Path Method (CPM) 96

3.5.5 Program Evaluation and Review Technique (PERT) 97

3.5.6 Example 98

3.5.7 Application of the PERT Method 102

3.5.7.1 Statistics Calculation for Activity Time 102

3.5.7.2 Example 103

3.5.7.3 Time schedule control 104

3.6 Planning Overview 107

Quiz 109

4 Project Cost Control 113

4.1 Introduction 113

4.2 Cost Types 115

4.2.1 Cost Estimate 116

4.2.1.1 Top-Down Estimates 117

4.2.1.2 Bottom-Up Estimates 117

4.2.1.3 Analogous Estimates 117

4.2.1.4 Parametric Estimates 118

4.2.2 Steel Structure Cost Estimate 122

4.2.3 Detailed Cost 124

4.2.4 Cost Estimate to Project Control 124

4.3 Economic Analysis to Project Cost 125

4.3.1 Work Breakdown Structure (WBS) 125

4.3.2 Organization Breakdown Structure (OBS) 126

4.3.3 OBS/WBS Matrix 126

4.3.4 Work Packages 127

4.3.5 Cost Control 128

4.3.6 (S) Curve 131

4.3.7 Engineering Cost Control 134

4.4 Cash Flow Calculation 135

4.4.1 Project Cash Flow 135

4.4.2 Impact on Increasing Cost 137

4.4.3 Project Late Impact 137

4.4.4 Impact of Operation E ciency 138

Quiz 139

5 Resource Hiring 143

https://www.wiley.com/en-cw/Project+Management+in+the+Oil+and+Gas+Industry-p-9781119084105 3/6
 5/28/2019 Project Management
5.1 Introduction 143 in the Oil and Gas Industry | Energy Economics & Policy | General Energy | Subjects | Wiley
WHO WE SERVE SUBJECTS(/EN-CW/SUBJECTS) THE WILEY NETWORK(HTTPS://WWW.WILEY.COM/NETWORK) ABOUT Curaçao
(/en-cw/)
5.2 Project Organization 144

5.2.1 Types of Organizations 144

EnterProject
5.2.1.1 your search by Title,
Organization as a Author,
Part of theKeyword
Companyor ISBN
145

5.2.1.2 Separate Project Organization 146

5.2.1.3 Matrix Organization 147

Description
5.2.2 Selecting the Best Organization 149
About The Author
5.3 Roles and Responsibilities of the Project Manager 151
Permissions
5.3.1 Project Manager as a Leader 152
Table Of Contents
5.4 Administrative Organization for Total Quality Management 154

5.5 Team Member Selection 155

5.6 Managing the Team 157

5.7 Allocate Resources to Project Plan 158

5.7.1 Example 158

5.8 Relation Between Project Parties 162

5.9 Document and Information Transfer 162

5.10 Information Transfer 163

5.11 Quality Control in the Design Phase 164

5.11.1 Inputs and Outputs of the Design Phase 169

5.11.2 Design Veri cation 169

5.11.3 Change in the Design 169

5.11.4 Approval of the Design 174

Quiz 177

6 Tendering, Bidding, and Contract Traps 183

6.1 Introduction 183

6.2 Contracts 184

6.2.1 Measured Contract 186

6.2.2 Lump Sum 186

6.2.3 Cost Plus 187

6.3 Contract Between the Owner and Engineering O ce 187

6.4 The Importance of Contracts in Assuring the Quality of the Project 189

6.5 Contracts in ISO 190

6.6 FIDIC Contracts 190

6.7 General Conditions in the Contracts 197

6.8 Arbitration and the Arbitrator 198

6.9 Bids and Tenders 200

6.9.1 Public (Open) Tender 200

6.9.2 Limited Tender 202

6.9.3 Negotiated Tender 203

6.9.4 Direct Order 203

6.9.5 Tender Technical Evaluation 204

6.9.6 Commercial Evaluation 207

6.9.6.1 Commercial Evaluation Methods 207

6.10 Closeout Report 208

Quiz 210

7 New Approach in Managing Oil and Gas Projects 215

7.1 Introduction 215

7.2 Quality System 216

7.3 ISO 9000 217

7.4 Quality Management Requirements 218

7.4.1 Quality Manual 218

7.4.2 Quality Plan 219

7.4.3 Quality Control 219

7.4.3.1 Why is Quality Control Important? 220

https://www.wiley.com/en-cw/Project+Management+in+the+Oil+and+Gas+Industry-p-9781119084105 4/6
 5/28/2019 Project
7.4.3.2 Management
Submittal Data 221 in the Oil and Gas Industry | Energy Economics & Policy | General Energy | Subjects | Wiley
WHO WE SERVE SUBJECTS(/EN-CW/SUBJECTS) THE WILEY NETWORK(HTTPS://WWW.WILEY.COM/NETWORK) ABOUT Curaçao
(/en-cw/)
7.4.3.3 How to Check Incoming Materials 222

7.4.3.4 Methods of Laying Out and Checking Work 222

EnterMaterial/Equipment
7.4.3.5 your search by Title, Author,
Compliance Keyword
Tests 224 or ISBN

7.4.3.6 When to Inspect Work 225

7.4.3.7 Paperwork/Documentation 226

Description
7.4.3.8 Quality Control Plans 228
About The Author
7.4.4 Quality Assurance 229
Permissions
7.4.4.1 Quality Assurance in the ISO 231
Table Of Contents
7.4.4.2 The Responsibility of the Contractor (Manufacturer) 232

7.4.4.3 Responsibility of the Owner 233

7.5 Project Quality Control in Various Stages 234

7.5.1 Feasibility Study Stage 234

7.5.2 Feed (Preliminary) Engineering 235

7.5.3 Detailed Engineering Study 238

7.5.3.1 Design Quality Control 239

7.5.4 Execution Phase 240

7.5.4.1 ISO and Control Work 242

7.5.4.2 Inspection Procedures 242

7.5.4.3 Importance of Contracts in Assuring the Project Quality 243

7.5.4.4 Checklists 243

7.6 Operational Phase of the Project 249

7.7 Total Building Commissioning System 250

7.7.1 Planning Stage 252

7.7.1.1 Identify Commissioning Team 252

7.7.1.2 De ne Owner’s Project Requirements with the Customer Agency 258

7.7.1.3 Develop Preliminary Commissioning Plan 258

7.7.1.4 Commissioning for Certi cations (LEED, Energy Star, etc.) 258

7.7.1.5 Commissioning Agent Costs 261

7.7.1.6 Cost-Bene t Analysis for Commissioning 262

7.7.2 Design Stage 262

7.7.2.1 Incorporate Commissioning into A/E and CM Scope of Services 262

7.7.3 Construction Stage 272

7.7.3.1 Review Submittals for Performance Parameters 272

7.7.3.2 Develop and Utilize Construction Checklists 273

7.7.3.3 Oversee and Document Functional Performance Testing 274

7.7.3.4 Test Data Records 274

7.7.3.5 Hold Commissioning Team Meetings and Report Progress 275

7.7.3.6 Conduct Owner Training 276

7.7.3.7 Turnover Commissioning Record 277

7.7.4 Building Commissioning Process Post-Construction Stage 279

7.7.4.1 Post-Construction Stage 279

7.7.4.2 Perform Deferred and Seasonal Testing 279

7.7.4.3 Re-inspect/Review Performance Before End of Warranty Period 280

7.7.4.4 Complete Final Commissioning Report 280

7.7.4.5 Recommission Facility Every 3–5 Years 282

7.7.4.6 Recommissioning 282

7.7.5 Advantages for Total Building Commissioning System 283

Quiz 284

8 Practical Risk Management for Oil and Gas Projects 287

8.1 Introduction 287

8.1.1 The Risk Management Process 288

8.2 Project Risks 289

8.3 Risk Assessment 293

https://www.wiley.com/en-cw/Project+Management+in+the+Oil+and+Gas+Industry-p-9781119084105 5/6
 5/28/2019 Project
8.4 Risk IdentiManagement
cation 294 in the Oil and Gas Industry | Energy Economics & Policy | General Energy | Subjects | Wiley
WHO WE SERVE SUBJECTS(/EN-CW/SUBJECTS) THE WILEY NETWORK(HTTPS://WWW.WILEY.COM/NETWORK) ABOUT Curaçao
(/en-cw/)
8.4.1 Methods of De ning Risk 296

8.4.1.1 Brainstorming 296

EnterDelphi
8.4.1.2 your Technique
search by297
Title, Author, Keyword or ISBN

8.4.1.3 Nominal Group Technique 298

8.4.1.4 Crawford Slip 299

Description
8.4.1.5 Expert Interviews 299
About The Author
8.4.1.6 Root Cause Identi cation 300
Permissions
8.4.1.7 Checklists 300
Table Of Contents
8.4.1.8 Documentation Reviews 300

8.4.2 Grouping the Risks 301

8.5 De ne Priorities 302

8.5.1 Matrix Method 302

8.5.2 Tabulated Method 303

8.6 Risk Response Planning and Strategies 305

8.7 Risk Monitoring and Control 306

8.8 Example 307

8.9 Operations risk 310

8.10 Methods of Risk Avoidance 312

Quiz 313

References 315

ABOUT SUPPORT
About us(/en-cw/aboutus) Corporate Governance(/en-cw/corporategovernance) Help(https://hub.wiley.com/community/support)
Careers(/en-cw/careers) Investors(/en-cw/investors) Contact us(/en-cw/contactus)
Corporate Citizenship(/en-cw/corporatecitizenship) Leadership Team(/en-cw/leadership-team) Site Map(/en-cw/sitemap)
Newsroom(https://newsroom.wiley.com/) Privacy Policy(/en-cw/privacy)
The Wiley Foundation(https://www.wiley.com/WileyCDA/Section/id-390059.html) Terms of Use(/en-cw/terms-of-use)

Copyright © 2000-2019(/copyright) by John Wiley & Sons, Inc.(/), or related companies. All rights reserved.

(https://www.wiley.com/)

https://www.wiley.com/en-cw/Project+Management+in+the+Oil+and+Gas+Industry-p-9781119084105 6/6