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Operational Readiness in Oil & Gas projects: What should this look like?

Operational readiness and project phases - Cubility - Perth

Projects in all industries undergo a life cycle comprising of Establish, Execute and Complete.

Projects in oil and gas industry, typically, have longish timelines and, therefore, the project phases are spread over longer periods of time. They require detailed working such as basic engineering, detailed engineering, various levels of project cost estimates and plans depending on project phase.

Article originally published by Aneeza Qazi on LinkedIn

Oil and gas industry projects break down the Establish, Execute and Complete into further steps such as Identify, Assess, Select, Define and Execute phases. As the project progresses from initial assessment phase to front end design level, the need for it to be suited and ready for smooth operation also arises. Therefore, the requirement of Operations Readiness has been realised and incorporated in project design and development process. A project cannot be implemented and designed to fulfil the requirement unless the end user i.e. Operations is also involved and satisfied. Moreover, considering the typical curve of theoretical risk mitigation costs vs project phases (as shown in the figure), the earlier operations readiness is incorporated in the project, lesser would be the costs of risk mitigation.

Operational readiness and project phases - Cubility - Perth

For the projects with significant budget, it is relatively easier to rope in Operations involvement from the initial phases of the project. Often, appropriately experienced resources from Operations are loaned for the purpose of the project and assigned to work as part of the project team. They may be in direct reporting to the project manager but are often independent to ensure a check and balance function on the project and are reporting to the project owner.

For smaller projects, it hardly makes economic sense to have an independent source for operations readiness. Moreover, for smaller projects, usually the importance of operations readiness is under estimated. If at all, a resource from Operations is assigned to carry out the operations readiness work. This is not prudent on two accounts. For one thing, people involved in day to day running of plants are usually on rotation. Their primary responsibility is to safely and smoothly operate the plant. The nature of their work and their shift-based timing make it difficult to respond to the project requirements.

Secondly, Operations Readiness requires specific expertise which is not necessarily present in every Operations personnel. In situations like these, the operations readiness work is left at the hands of project management team who tries to fulfil the role. This can be detrimental to the project as an independent view and specific expertise is needed to deliver a project that fulfils operational requirements and is ready to start without hiccups.

For small projects, while it does not make economic sense to have a dedicated operations readiness resource for the project, it does make sense to have an operation readiness function in the organization. In a matrix structure, that function can then work on multiple projects whenever operation readiness role is required.

In some organisations where the importance and need for operations readiness is well established, this practice is adopted. In an organisation which does not see the need for operation readiness for smaller projects, as a project manager, in order to convince the project sponsor, it would make sense to quantify the life cycle phases vs risk mitigation costs and demonstrate the benefit for having operation readiness resource early in the project.

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