Project Management in the Oil and Gas Industry

1.3 Project Life Cycle
The project definition is a set of activities that has a start time, time period, 
and end time. These activities vary from project to project depending on 
the nature of the project. For example, a cultural or social project or civil 
project such as the construction of a residential building, hospital, road 
and bridges or industrial projects are different in their characteristics. In 
our scope we will focus on industrial projects.
Civil projects, in general, vary from project to project depending on the 
size and value of the project. It can be anything from constructing a guard-
room to constructing a nuclear plant.
Therefore, the quality varies depending on the size of the project, 
especially in developing countries.
In a small project, it might be sufficient to apply a quality control only 
where small contracting companies or engineering offices do not wish 
to have a global competition. For example, increasing the quality will 
increase the project’s total cost and if these companies have quality assur-
ance tracking systems that will also increase the cost of the project as a 
whole. Therefore, they often apply the quality control only within the 
structure safety of the building.
In the case of major projects, there are many execution companies or 
engineering offices working. Therefore, we must also take into account that 
firms implementing quality assurance procedures are necessary and vital, 
as well as the quality control carried out in all phases of the project based 
on the project specifications.
Stages of construction projects start with a feasibility study, followed by 
preliminary studies of the project, following detailed studies with detailed 
drawings. Then, the operation crew will receive the project to run.
In all these stages, there are many types of quality control that are 
required to obtain a successful project that can return benefits and money 
to the owner and all participants in the project. Figure 1.1 shows the life 
cycle of all projects.
From this figure, it is clear that when a feasibility study has been finished 
five percent of the progress of the project is shown and, upon completion 
of the engineering designs, 25 percent of the project progress is shown, 

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Project Management in the Oil and Gas Industry
and the biggest project stage, in terms of time and cost, is the period of the 
execution phase.
As shown in Figure 1.1, after the feasibility study, senior management 
should have a definite answer for the following question: will the project 
continue or will it be terminated? If there is a positive situation, then cross 
the gate to the next stage which is preliminary studies, which will provide 
a more accurate assessment of the project. After that, another decision will 
need to be made on whether the project will move forward to the detailed 
engineering and construction phase.
At each phase of the project, there is a role for the owner, the contractor, 
and the consulting engineer. Each system has its own method of project 
management and every stage of these methods has its own characteris-
tics and circumstances. These follow a change in the area of employment 
or Scope Of Work (SOW) that clarifies each stage for each of the three 
parties.
A characteristic of the project life cycle is that it changes from time to 
time. In each period there is a different number of personnel and employ-
ment in the project. For example, at the beginning of the project, the 
number may be very small but then increase when increasing the number 
of activities carried out and then gradually decrease until the end of the 
Feasibility study
appraise
Select phase
Define
Construction
Start operation