PDO FEED Office Value Proposition

Abstract

Abstract The Petroleum Development Oman (PDO) projects portfolio is going through a significant change as its oil and gas fields mature. In addition to the large number of repetitive brownfield developments, there is now an increase of major projects as Enhanced Oil Recovery opportunities mature. In addition, a number of major gas compression projects need to be implemented. To sustain its oil and gas production PDO require to implement several major projects over the next ten years, each in the range from $ 100 mln to $ 2.0 bln. PDO experience demonstrated that value improving practices are linked to improved capital project outcomes. Value improving practices are out-of-the-ordinary practices used to improve project performances and they are primarily used during initial phases of project i.e. from identifying the opportunity to define Front End Engineering Design (FEED) phase. Due to lack of in-country FEED capability, all major FEED works were carried out abroad by International Design consultants and this FEED package was issued to Engineering Procurement & Constructing Contractor for Bidding / Detail Design purposes. These FEED packages were resulting in followings deficiencies:- Insufficient FEED definition leading to risks and uncertainties during detail designMultiple changes to design at significant cost and schedule impactLack of Adequate Analysis of Potential SolutionsUnrealistic Plan/budget (optimistic forecasting)Continued loss of potential optimisation from the leverage opportunities that existRework due to changes in parallel activities in the same area lead to discussion on commercial/contractual terms, which causes delay in absorption of changes in FEED work.Lack of standardization of designPoor operability and maintainability of plantPoor first year + availability of new plant Ultimately these deficiencies were leading to prolonged project completion cycles and delay in production. In view of these FEED package deficiencies and increase in PDO portfolio of major projects and the scarce market resources, PDO established in-house FEED capability. This reduces project lead time, improve project definition prior to the Final Investment Decision (FID) and will provide development opportunities for Omani staff. The 60 staff FEED capability was established with in-house resources, supported by a capable contractor. Training of PDO Omani staff in the additional skills was carried out in Q2 – Q4 2007 in a highly professional FEED office, while in the same period, office, Information technology (IT) infrastructure established and a support contractor was selected.