Project Management in the Oil and Gas Industry

1.2 Project 
Characteristics
One of the most important features of a project is the selection of indi-
viduals at different locations of the same company. In some international 
projects, the individuals are from different countries, cultures, educations, 
and employment and all of these individuals have different skills. With 
all those differences, they must work together to complete the work in a 
specific time and definite target.
The project manager has to coordinate between the members of the 
project to reach the goal of the project. As a result of rapid development 
in modern technology, this specialty has become important because, now 
days, any project contains many different disciplines. An explicit example 
is in construction projects, where there is a team for constructing the rein-
forced concrete and other teams for finishing the work, such as plumbing 
work. So, every branch of the construction activity has its own technology 
and skills. Therefore, the project manager has to cooperate between the 
different disciplines to achieve the project objective.

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How to Manage Oil and Gas Projects 3
The primary goal of a project manager is to complete a project with high 
quality and achieve the objective at the same time.
Every project has a main driver. In general, the driver is one of the two 
driving forces or, in other words, is one of the two philosophies in manag-
ing a project. One of them is cost-driven and the other is time-driven.
The driver is considered to be the underlying philosophy in the manage-
ment of a project, which must be determined by the director of the project 
with other parties, as well as the official sponsor of the project and the 
stakeholder. The project driving philosophy should be known to both the 
technical and administrative department managers.
To illustrate the above two factors’ effects, we should think about all types 
of projects that are running around us. We will find that, in some projects, 
reducing the cost is the major factor and the time will be the second factor 
and, when the project duration time increases, it will not affect the project 
in the operation phase or, in precise meaning, it will not affect the owner 
and his investment. The building of houses, mosques, churches, museums, 
and other projects that have a social aspect is an example.
On the other hand, the aim of some projects is to reduce the time, which 
is the main challenge, so it will be a time-driven project. Examples of these 
projects include hotel projects because any projects that save in time will 
gain in profit, for an owner’s profit from a hotel is calculated per day of 
using the rooms in the hotels. Other examples are oil and gas or petro-
chemical projects in the petroleum industry, where any day that can be 
saved will save millions of dollars per day since production is measured 
by barrels of oil per day (BOPD) or millions of standard cubic feet per day 
(MMSCFD), which will multiply the oil or gas price respectively and bring 
in more revenue. For example, if the gain of production from the project 
is 50,000 BOPD with an oil price of forty dollars per barrel, every day can 
save and the owner can gain 2,000,000 dollars.
From the above discussion, the main driver in petroleum projects is 
time. Therefore, the main target in these projects is to reduce the time. It 
is very important to define the basic driving force for a project, which is 
either cost or time. It is essential that all staff working on the project should 
know this information and this is the responsibility of the project manager.
Any group of teams at work, both in design or execution, should 
provide proposals, recommendations, and action steps that are in the same 
direction of the project driver in reducing the time or cost.
It is necessary that the target is clear to everyone to avoid wasting time 
in discussing ideas and suggestions that are not feasible. Imagine that 
you are working on a housing project and one of the proposals from the 
engineers is to use a type of cement to provide a rapid setting to reduce the 

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4 
Project Management in the Oil and Gas Industry
time of construction, but it will increase the cost. Is this proposal accept-
able? Certainly, it will not be accepted. On the other side, in the case of the 
construction of an oil or gas plant or new offshore platform, imagine if one 
of the proposals is the use of materials that are the cheapest, but it requires 
extra time to import from abroad, which will delay the project some days. 
Is this proposal acceptable? Of course this proposal is unacceptable, but 
if we use these proposals for the other project, we will find that the two 
proposals are excellent and acceptable.
It is clear that when we lose communication between the project manager 
and the personnel, there is a lot of confusion. If everyone works hard, but in 
different directions, this becomes wasted effort and everyone is not going 
in the same direction in order to achieve the success of the project.
Moreover, it is important to communicate with suppliers and contrac-
tors, so that their proposals in supply materials and construction should be 
within the project driven criteria.
Project characteristics can be summarized as follows:
• A project has a specific target.
• A project is unique and cannot be replicated with the same 
task and resources expecting to give the same results.
• The focus is on the owner requirements and his or her 
expectations from the project.
• It is not routine work, but there are some tasks that are 
routine.
• A project consists of a number of activities that contribute to 
the project as a whole.
• There is a specific time in which to finish a project.
• A project is complex in that it works by a number of 
individuals from different departments.
• Project managers must be flexible to cover any change that 
occurs during the project.
• There are uncertainty factors, such as the performance of 
individuals and their skills, for some of the unfamiliar work 
or unknown external influences that may not have happened 
before.
• The total cost is defined and has a limited budget.
• A project gives unique opportunities to acquire new skills.
• It gives impetus to the project manager to learn to work 
under changing circumstances, as the nature of the project 
is to change.

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How to Manage Oil and Gas Projects 5
• There are risks with each step of the project and the project 
manager should manage the risks to reach the project goal 
at the end.