Improving Operational Efficiencies on Megaprojects

Each year, Coreworx aspires to present industry-leading content  to the oil and gas community, while adding some fun and networking. Project Excellence has definitely become our top event with attendance growing year after year. This year’s attendees included project professionals from, Fluor, McDermott, Maersk Suncor, Enbridge, Nexen Energy, Siemens, FMC, KBR, Wood Group, and more.

In Houston, Trey Hamblet of Industrial Info Resources (IIR) gave us his annual Gulf of Mexico Industry Outlook. Compared to a year ago, the project landscape is looking quite different. In 2014, projects were sprouting up everywhere and domestic crude oil prices were hovering over $100/bbl, which definitely isn’t the case this year. That being said, those who have been in the industry long enough know that everything in oil and gas is cyclical.  As Trey pointed out, “Too much was planned at one time.” Some projects will continue to develop at a slow rate, while many megaprojects will likely be postponed if they aren’t already.

And the outlook in Calgary is very similar this year. With the economic conditions of 2015 top of mind for everyone, presenters at both conferences focused on what projects can be doing now to improve project efficiencies and thus gain a competitive advantage.Now, more than ever, owners need to work with their EPCs to develop efficiencies that help projects get built safely, on time, and under budget.

Effective change management is one key tool that helps projects  avoid cost overruns.  Scott Gillis of NSB Energy defined change management as “the process of incorporating a balanced change culture of recognition, planning, and evaluation […] in an organization to effectively manage project changes. ” What better time than during a downturn to really appreciate how changes in scope can make or break your project deadlines and budgets?

In addition to Trey and Scott’s presentations, other presentation topics this year included:

  • Indispensable Practices for the Project Manager: An Owner’s Perspective, by Alan Kendall
  • Interface Management: Improving Compliance on Capital Projects, by Kelly Maloney
  • Achieving Project Compliance with New Best Practice Solutions, by Joel Gray
  • Interface Management: Improving Operational Efficiency on Capital Projects, by Samin Shokri
  • Increase Vendor Effectiveness with Supplier Deliverables Enhancements, by Dawn Fiander-McCann

As Todd Hirsch, chief economist at ATB Financial, mentioned in Alberta this past month, it’s time to regain control. “We have to remember only 11 years ago, $45 [per bbl] was a record high.… But what’s happened since then is cost escalation, especially with labour costs. They have really ballooned over the last 10 years.” Houston and Calgary will come out of this slump. Owners and EPCs may not have full control of what happens outside of their companies, but they can start by regaining control internally. By providing the tools megaprojects need to keep them operating efficiently, owners can improve the likeliness that their projects are completed on time and on budget.

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