Project Management in the Oil and Gas Industry

5.2.1 Types of Organizations
All types of organizations have their advantages and disadvantages. 
Therefore, they must be taken into account when choosing the appropriate 
organization of the project according to the nature of the project, its char-
acteristics, and prior experience for projects undertaken by this company 
or other similar organizations.
We must have a full knowledge of these types of organizations and the 
advantages and drawbacks whether you belong to members of the clients for 
the work of this organization, are one of the directors of the project, or are a 
member of the project because you must know the gain and loss that could 
happen when working on this project. In addition, through advantages in 

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every organization you have the motivation and driving forces, which will 
be used to move the individuals who work with you. Through the defense 
of those features, you have the motivation of the company’s head office.
The types of organizations are as follows:
5.2.1.1 Project Organization as a Part of the Company
This organization is used, often, for small projects that are within the com-
pany itself, such as industrial projects that entail increasing the product 
line, expanding the plant, or creating a new production line.
In this case, define the departments that are responsible for the project. 
This organization is also used in a type of project that contains new tech-
nology, such as buying a new advanced machine in which the supervision 
of the project rests and operation will be with the engineering management 
responsibility.
In this project organization, one of the departments will manage the 
project. This department will have daily work performed by individuals 
and the department shall be responsible for the project and report to the 
senior management of the company. Now let us imagine what the advan-
tages and disadvantages are to this type of organization.
The most important features can be summarized as follows:
• We can easily transport the personnel to and from the 
project, which helps to exchange experiences and transfer 
modern technology to the largest number of company labor.
• It is easy to utilize the employment.
• The individuals are working on the project in the same 
section of functionality that they normally work and, there-
fore, their presence in the project will enhance the promo-
tion of individuals.
• Increasing the experience of individuals who work in 
the project will increase the benefit to each individual and 
the company as a whole.
The disadvantages to this type of organization are as follows:
• The department is in charge of the project and the daily 
routine must be taken into account to determine the time 
that will be taken to implement the project.
• Technical problems can be solved easily as they work on the 
same job function, but they usually avoid the administrative 
work.

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Project Management in the Oil and Gas Industry
• This organization, in most cases, will not be given respon-
sibility for a specific individual, so that work will be the 
responsibility of the department as a whole. This means that 
it may be two persons working on the same activity in the 
project as maybe one of them busy in the department of 
regular activity or on vacation or the work may be reviewed 
by more than one person, which will cause a loss of account-
ability in the project.
• The motivation of a working group will be weak, as the 
senior management will consider it their usual routine work.
5.2.1.2 Separate Project Organization
This organizational structure functions is an independent unit separate 
from the company and its connectivity is to discuss the company and 
the numbers of periodic reports on the achievements that will be sent to 
the company.
This sort of organization is in industrial projects and supervises projects 
for a company that may not have many projects at the same time.
There are some disadvantages and advantages of this organization and 
the most important characteristics are as follows:
The project manager has full authority to manage the project and reports 
to the Executive Director in the organization.
• Everyone in the team directly reports to the project manager.
• A separate working group is given a sense of independence, 
which creates a high level of commitment and accuracy in 
work.
• In this organization, the understanding of work orders and 
the implementation are easy.
• There will be powerful, fast decision-making and vitality 
throughout the project.
• It reduces the communication between individuals in the 
project and the people who work in the company head office.
The disadvantages of this type of organization can be summarized as 
follows:
In the case of more than one project in the organization, each project 
should have teamwork on it, causing a duplication of effort and increased 
costs if we look at the individuals who carry out the services and adminis-
trative affairs, which would be repeated work in all projects.

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• The less communication there is between the project and 
technical divisions, in the case of projects that need special 
technology, the more difficult it is to transfer expertise from 
the company organization to the project.
• The project group is considered individual and there is rebel-
lion against the actions in the head office.
• The project has a specific time, objective, and target with 
separate project team members. Through this environment 
of work, there will be a growing sense of interdependence 
with the project, which means the relationship between 
these team members and their counterparts in the company 
head office will be cooled, but, on the other side, the indi-
viduals in the head office believe that the members of the 
project benefited greatly from working on the project, which 
generates some feelings of hatred.
• There is control of the project personnel, the fear of loss of 
administrative promotion, and upward mobility in the com-
pany head office.
• This kind of organization has defects that can be prevented if 
an appropriate project manager is selected.
5.2.1.3 Matrix 
Organization
The matrix organization is most common in the case of construction com-
panies or consultancy firms that have more than one project running at 
the same time. The target of this type of organization is to be used for 
special projects working in the field of advanced technology, so that they