SPEAKER:  Basker Murugappan, Production Technologist,  Southern California Gas Company

TITLE:        What have we Learned in 20 yrs of using a Front-End Loading Process for O&G Projects ?   

Abstract:  

 Within a portfolio of 62 major projects spanning the past 3 years, 70% of projects failed to deliver the target production volumes on time or within budget.   These projects include the simple and the complex, such as:  greenfield developments, brownfield developments, field redevelopments, equity purchases, and partner operated ventures (POV).  Even individual workovers exhibit similar failures to meet expectations.   The impacted parties include major operators.  Reputable and recognizable National Oil Companies (NOC), Integrated Oil Companies (IOC), and Independents all suffered.  Each of these reputable and capable organizations employed mature project assurance or other gated processes with basis of design (BOD) or field development plans (FDP) at each sanction or execution gate.  Almost all used some form of Opportunity Realization Process (ORP),  Pre-Project Planning (PPP), Front End loading (FEL) gated process, yet the integrated management approach still failed.  Why?  All effective ORP or gated project assurance processes depend on a common basic element:   Wide-ranging, overlapping experience within the contributing disciples.  In each of the failure cases, the experience was either limited, retired, or pushed aside by political or financial pressures.  As a result, technically infeasible projects were sanctioned.  The author will illustrate 5 example projects, each resulted in the destruction of asset value rather than creation or realization of value.