Project Management in the Oil and Gas Industry

1.4 Is this Project Successful?
When determining whether a project successful, you should focus on the 
management of the project. You might see a high-rise building and think that 
the project seems successful, but is the project management successful too? 
To answer this question you need to answer the following three questions:
1. What is the plan and actual execution time?
2. What is the actual cost and budget?
3. Is the project performance according to the required 
specifications?
For the last question, we can answer yes because for a big project we 
cannot agree or approve anything with lesser quality or that is beyond 
specification. It is safe to assume that the quality is a red line that cannot be 
crossed or negotiated.
Therefore, the successful project manager has to achieve the goal of the 
project and satisfy all stakeholders. At the same time, the completion of the 
project on time and cost will not be more than the approved budget.
1.4.1 Project Management Goals
Every project should have a specific target or targets and each target should 
be defined for all the team members in the project.
In any project, we will have the following elements:
• Money
• Manpower
• Machines

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How to Manage Oil and Gas Projects 23
The target of project management is to use the above elements to achieve 
the project with less cost and high quality.
So, every job in the project must manage one or more of the available 
resources and optimize the use of the resources in order to reduce losses 
and achieve the project target within the time constraint, cost, and quality.
Based on the PMP guide, project management is characterized by mul-
tiple areas or topics that must be managed at the same time. These topics 
are as follows:
1. Project integration management
2. Project scope management
3. Project time management
4. Project cost management
5. Quality management
6. Human resource management
7. Communication management
8. Procurement management
9. Risk management
Based on Kotter, J.P (1996), there is a good differentiation between the 
management and the leader. Management is a set of processes that can 
keep a complicated system of people and technology running smoothly. 
The most important aspects of management include planning, budgeting, 
organizing, staffing, controlling, and problem solving. Leadership is a set 
of processes that creates organization or adapts to significantly changing 
circumstances. Leadership defines what the future should look like, aligns 
people with that vision, and inspires them to make it happen despite the 
obstacles.
1.4.1.1 Project Integration Management
The purpose of integrated management is to ensure that all elements of the 
project that are interdependent have a good correlation between them. It 
is done through good planning and the existence of an operational plan 
for the project, which is the interdependence between the members of the 
team. At the same time, it finds a way to control the project performance in 
case of any change in the project.
1.4.1.2 Project Scope Management
The extent of the project, its size, and what must be fixed and known need 
to be established. Therefore, we must take the necessary actions to ensure 

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Project Management in the Oil and Gas Industry
that all work required has been known with specific planning and that only 
the work necessary to achieve the success of the project is done. This is 
done by identifying the volume of work and planning.
1.4.1.3 Project Time Management
The project must have a specific start and finish date and the duration of 
the implementation of the project must also be defined either by the owner 
or by the contractor who will carry out the activity or by the agreement 
between both.
So that we can finish the project according to the schedule and manage 
the project time, the schedule plan must be done for all the activities and 
the time of each activity and the relation between them must be defined.
No one can achieve the project on schedule if the time commitment for 
each activity is not followed.
1.4.1.4 Project Cost Management
To determine the time required at each of the activities of the project, the 
resources should be allocated to the execution of the activity by the indi-
viduals, materials, and equipment.
Therefore, the cost of each activity and the rate of spending on each 
activity have to be estimated to obtain the cash flows through the project.
Managing the cost of the project requires actions and steps to ensure 
that, in the end, the total money spent on the execution of the activities 
equals the budget allocated for the project, which will be allocated from 
the initial cost estimate.
1.4.1.5 Project Quality Management
There is no doubt that the quality borders are a commitment to quality 
specifications, both for the materials and processes. In most cases, qual-
ity is overlooked when discussing the projects and only focusing on time 
and costs.
However, it does not mean that quality is less important than time and 
costs, but the relationship between these three elements are very depen-
dent on each other. So, to be clear, any activity is considered to have been 
finished only if it matches the specifications. There is no doubt that these 
specifications have a significant impact on determining the cost of the 
activity. 
It is clear, already, that the management of a project is done through a set 
of plans for the time, cost, and quality. The preparation and implementation 

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How to Manage Oil and Gas Projects 25
of these plans should be shared with all the team. It is normal that any fail-
ure of any function of the organization affects the entire project, in terms 
of time or cost or quality.
1.4.1.6 Project Human Resource Management
It is essential to use ordered steps and reasonable tools that allow making 
good use of manpower. The establishment of a good organization, accord-
ing to the needs of the project and the needs of individuals, is essential. 
The work of human resources should match with the schedule planning of 
the project. There must be conformity between the individual objectives 
and project objectives through motivation and knowing that the contin-
ued success of the project is a success for all. To be profitable and gain a 
strategic win is the basis for the interaction between project management 
and personnel.
1.4.1.7 Project Communications Management
There must be a procedure for providing good communication between 
members of the team by planning and holding regular meetings for team 
members and other partners in the project.
The way of transferring information between the team members 
should be identified, quick, and easy. Now, there are many types of tech-
nology that can achieve management and good communication such 
as networks, e-mail, and meetings that can be held through a video 
conference.
1.4.1.8 Project Risk Management
Each project has its own risk, whether the result of technical aspects or the 
result of procedures and the project execution sequence. Therefore, the risk 
should be managed by identifying it first, setting priorities, and then find-
ing a solution according to the type of event, its likelihood of occurring, 
and its potential impact on the project.
This is followed by a periodic follow-up phase precisely with the assur-
ance of the distribution of responsibilities and authorities for each item 
that will have a high impact on the project.
1.4.1.9 Project Procurement Management
Every project depends on the procurement of materials or equipment. 
Therefore, it is necessary to prepare procedures to deal with external ven-
dors to make the purchases serve specific objectives of the project.

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Project Management in the Oil and Gas Industry
Therefore, we must determine purchasing strategies as well as the nature 
of the contracts and how to manage the identification and follow-up of 
procurement procedures. We must also identify how to maintain the qual-
ity of purchases or services provided to the project.