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• Kundlik Nimase

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Gated process of large E&P players for project delivery Company

Stage-gate variant Gates

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Key objectives of phase

Concept selection

Feasibility

Sanction

Ready for start-up

•Appraise

•Select

•Define

•Execute

•Operate

•Feasibility

•Evaluation and selection

•FEED & Detailed design

•Construction

•Operation

•Identify and select alternatives

•Generate and select alternatives

•Develop alternatives

•Execute

•Operate and evaluate

•Identify and assess

•Select

•Define

•Execute

•Operate

Evaluate feasibility and commercial viability of development

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Generate, select and propose concept

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Define concept • and finalize cost, schedule and technical specifications, and obtain sanction

Stage Gate Gamij

Design, build and commission facility/asset within agreed parameters

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Safe start-up and final proving of facilities ready for steadystate

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Stage-gate PMP – in general Invented

by Robert G. Cooper in 1980’s. Oil & Gas industry adopted this after 2000 onwards.

Stage-1

: Identification and Assessment of Opportunities.

Stage-2&3

: Development Planning stages

Stage-4

:Execution of the Development Plan :Management of Production Operations

Stage-5

Stage Gate Gamij

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Stage-gate PMP – in general 

Role of Project Teams & Executive Decision Board -



Stage-gate PMP helps organization  In ensuring that all data/deliverables are available before moving to next stage  Defines the points & procedures for making management decisions based on economics/supporting information from Project Teams whether to proceed or to short close it Stage Gate Gamij

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Stage-gate PMP – in general 

Model showing how shareholder value is created, beginning with identification and ending with value delivery –

Companies using Stage-gate PMP under different names Stage Gate Gamij

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This is an accepted Industry Standard…… • • • • • • • • • • • • •

CPDEP - Chevron Project Development and Execution Process OPREP – Woodside Opportunity and Project Realisation Process ORP – Shell Opportunity Realisation Process CVP – BP’s Capital Value Process OM - Exxon-Mobil’s Opportunity Management Process VAF – BG Group Value Assurance Framework ACES - Anadarko Capital Effectiveness Systems CVP – Statoil’s Capital Value Process SGM – OMV Stage Gate Manager MPMP - Marathon Project Management Process SQAD - Santos Quality Asset Development Process AGP - Apache Gate Process, in development Stage Coach – Mustang Engineering’s method to support Owners systems

• IPA - Stage Gate Capital Value Processes (FEL 1 -5) – Recognised Independent method of measurement • PMBOK ( Project Management Book of Knowledge ) – 4th Edition Chapter 2 • SPE – Recognised by the Society of Petroleum Engineers ( SPE 102926 ) • IHRDC – Online Training courses in Stage Gate Competencies • Ernst & Young – “Capital Projects life cycle” – www.ey.com/GL/en/Industries/Oil--Gas/CapitalProjects-life-cycle Stage Gate Gamij

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Recommended Stage-gate PMP for ONGC Explore to Discover

Discovery 1

Gate

Reserves Stage 2 Commerciality Commerciality 3 Assessment CR ( Concept Report) Select 4 Concept FDP (Field Development Plan) Define 5 (detail FR) RFSU Execute 6 ( Ready For Start up)

Reserve Appraisal

Commencement Commission 7 & Start-up Steady state Steady state 8 Operations Stage Gate Gamij

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Details of Stages (1/4) Stage 1: EXPLORE to DISCOVER The

objective of this stage is to establish hydrocarbons in the acreage. In this stage G&G data is analyzed, probable locations for exploration are finalized and exploration well program is executed to confirm the discovery. Revision of drilling exploration portfolio after completion of drilling is undertaken. The decision of whether the discovery merits further appraisal will be taken. FPR(Gate

Keeper) – Basin Manager; Gate Owner :-Director (Exploration)

Stage 2: RESERVE APPRAISAL The

objective of this stage is to reduce geological uncertainty so that further development can be planned. In this stage, an appraisal program is chalked out to drill further exploration wells for the purpose of delineation of the reservoir/ field. Based on which the geological model is reviewed and reservoir characterization is carried out. In this stage, commerciality of the discovery is established and decision to develop further will be taken. Reservoir volumes are refined and firmed up for development. FPR(Gate

Keeper) – Basin Manager; Gate Owner :-Director (Exploration)

Stage Gate Gamij

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Details of Stages (2/4) Stage 3: COMMERCIALITY ASSESSMENT The

objective of this stage is to prove feasibility & commerciality of the field development. In this stage simulations and dynamic modeling are done extensively. Preliminary feasibility of facilities and development well are studied. Based on which commercial analyses are carried out for various price scenarios. At the end of this stage, declaration of commerciality (DOC) will be submitted to DGH. FPR(Gate

Keeper) – Chief NMFD; Gate Owner : Dir (Exploration)

FPR(Gate

Keeper) – Asset Manager; Gate Owner - Dir (Offshore)/ Dir (Onshore)

Stage 4: SELECT CONCEPT The

objective of this stage is to select best development concept from range of options for reservoir management & facilities etc. In this stage, facility & well concept studies, flow assurance studies, contract strategy and risk management processes are carried out. Commercial analyses conducted and cost estimates are worked out. At the end of this stage, plans for technology, preliminary wells, stake holder management, Scope of work and contracting strategy are finalized. In principle approval of Concept Report (CR) is the major outcome of this stage. FPR(Gate

Keeper) – Asset Manager; Gate Owner - D (Off)/ D(On) and D(Expl) Stage Gate Gamij

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Details of Stages (3/4) Stage 5: DEFINE DETAILED FEASIBILITY REPORT The

objective of this stage is to generate and get approval of Field Development Plan (FDP). In this stage, detailed field development plan consisting of Front End Execution Design (FEED), Functional & technical specifications, well designs, cementing, Drilling policies etc. HAZOP / HAZID are carried out. Commercial analyses for the project are conducted. Government approvals, environment clearances, regulatory approvals are obtained in this stage. FPR(Gate

Keeper) – Asset Manager; Gate Owner - D (Off)/ D(On) and D (Expl)

Stage 6: EXECUTE & BUILD The

objective of this stage is to build and make facility ready for startup as per schedule. In this stage all contracts are awarded and executed. The facilities are commissioned. Regulatory approvals are obtained for startup. At the end of this stage, the facilities are ready for startup and handed over to the concerned Asset by the executing agency. Asset Development Board (ADB) releases the development well locations which are drilled by the Drilling services. FPR(Gate

Keeper) – Asset Manager; Gate Owner - D (Off)/ D(On)

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Details of Stages (4/4) Stage 7: COMMISSION & START UP The

objective of this stage is to commission the facilities and drilling of wells will be completed and finally, production will be started. In this stage, facilities are hooked up with pipe lines etc., HAZOP/ HAZID status are some of the activities undertaken. Keeper) – Asset Manager; Gate Owner : D (Off)/ D(On) Stage 8: STEADY STATE OPERATIONS FPR(Gate

The

objective of this stage is to attain steady state in the operations and handover accountability of operations to the Asset Group. In this stage, reservoir management plan, field surveillance plan & well optimization plans are implemented. FPR(Gate

Keeper) – Asset Manager; Gate Owner : D (Off)/ D(On) Stage Gate Gamij

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Salient Features of Checklists 

Each checklist is divided into 8 broad criteria 

 

Objective Gate criterion/ decision Governance  

   

Data/ tools availability Focus activities Detailed activities/ execution approach Review mechanism  





Gate owner Gatekeeper

Internal peer review External Review

Key deliverables & documentation

Provision of exception report Stage Gate Gamij

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Introduction of Phases & Stage Gates Ability to control from start to finish, ability to assess risk, ability to assign roles & responsibilities more clearly GATE

Discovery

Commerciality

Concept Select

FID

RFSU

1

2

3

4

5

Explore

Select

Define

Execute

Prove commerciality of development over range of likely outcomes

Generate, select and propose concept (Reservoir evacuation and Facilities)

Define concept and finalise cost, schedule and technical specifications and obtain project sanction

Design, build and commission facility/ asset within agreed parameters and hand-over to operations

“Does this align with the business objectives and do we know what we are getting into?”

“Do we have at least one commercially feasible development?”

“Have we selected the correct/optimal concept?”

“Is everything in place to ensure success?”

“Are we ready to start up and is everything safe?”

Prospect evaluation

Define range of reserves and economic range of development options

DOC approval

Detail technical definition to be able to place detail design contracts

Project mgmnt

PHASE Identify leads, prospects and acquire acreage

Objective

Key Question at closure Gate

Key activity

Appraise/

Data acquisition, and feasibility studies

Assess

Data acquisition and feasibility studies

Concept selection studies Contracting strategy

Approach market for key contracts

Stage Gate Gamij

Establish sales agreements

Obtain sanction

Deliver facilities, handover to operations Operations readiness

Operate Safe start-up and final approval to facilities ready for steady state Project closeout

Final hot commissioning & introduction of hydrocarbons Production and optimisation of plant operating methods

Regulatory approvals

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What is the Gate Plan / Roadmap….? Phase

Sub-Gates – Handover Points

Gates – Key Decision Points

Objective of Phase

Key Decision to be made

Key Activity

Resource Category

Class of Estimate

Focus Activities ( Level 1 )

Peer Reviews

Key Deliverables

Stage Gate Gamij

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Definition of Select Phase Activities & Deliverables Discovery

Commerciality

Concept Select

Select

RFSU

1

2

3

4

5

Explore

Appraise/ Assess

Select

Define

Execute

Operate

“Have we selected the correct/optimal concept?” Key Decisions

•Submit FDP for Approval •Agree contracting strategy •Gate 3 - Agree Concept and initiate definition phase. •Authorise Funds for next Phase

Objectives

•Generate, Select and Propose Concept (Reservoir evacuation and Facilities)

•Generate FDP

Deliverables (Subject to Project Size & Complexity)

Focus Activities •Facility and Wells Concept Studies •Flow assurance studies •Environmental Studies & data acquisition •Carryout PHSER 1 •Initiate Risk Management Process •Prepare contracting strategy •Seek EOI’s / Markey survey •Commence Contractor prequalification •Alignment with JVP’s •Facility & Wells concept studies. •Pipeline Route Studies •Prepare and gain approval of Statement of Requirements •Plan & Budget for subsequent Phase •Finance planning and sign off on tax offsets •Sales strategy

•Concept Selection Report •Statement of Requirements •Concept Risk Assessment •FDP prepared and ready for OC submission •Development Budget •PEP for Define Phase Inc Level 2 Schedule & Class 4 Cost •Prelim Well Plan •Technology Plan •Risk Register & plan •Regulatory Approvals Plan •Stakeholder Management Plan •Prelim CR Management Plan & Compliance Report •Operations Philosophy •Contracting Strategy •Updated economics •Lessons Learned review & Compile •AFE for subsequent Phase

Stage Gate Gamij

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Definition of Define Phase Activities & Deliverables Discovery

Commerciality

Concept Select

Select

RFSU

1

2

3

4

5

Explore

Appraise/ Assess

Select

Define

Execute

Operate

“Is everything in place to ensure success?” Key Decisions

Objectives

•Gate 4a – Handover from Developments to Projects •Gate 4 – Agree state of readiness to proceed •Authorise funds for full sanction of Project

•Gain approval of FDP •Fully define concept including FEED &

Deliverables (Subject to Project Size & Complexity)

tendering of main packages.

Focus Activities

•Finalise basis of design •Finalise well basis of design •FEED/ Technical & Functional specifications •Mobilise project team / project office •Secure land (onshore) contingent on final investment decision / ROU’s

•Execution Planning •Government & Environmental approvals •Implement Management of Change •Prepare contracts / T&C’s / Scopes of work •Finance sign-off on contracts - Tax efficiencies •Tender & Review all major facility contracts •Tender & review all drilling/wells contracts •Define long lead item commitment plan •Engage Operations Manager •Prepare Oil/Gas sales agreement(s)

•Final Business Proposal inc Updated Economics •Approved FDP •Project Specifications, Codes & Standards •Asset/Operating Plan •PEP Inc Level 3 Schedule & Class 3 Cost & Performance Metrics •Interface Management Plan •Risk Management Plan •Quality Assurance Plan •HAZOP / HAZID •HSE Plan & Contractor HSE MP •Emergency Response Plan (ERP) •CR Management Plan & Compliance report •Public Consultation Plan (PCDP) •Major Contracts recommendations •Environmental Clearance •Lessons Learned review & Compile •AFE for Construct Phase •Oil/Gas/LNG sales agreement (HOA)

Stage Gate Gamij

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Recommendations & Way forward (1/2)      

Stage-gate PMP is recommended for both Green field & Brown field development projects. All future and current development projects proposed to be executed with Stage-gate PMP . Templates for each stage deliverables & underlying process to be prepared. Empowerment: Project Leaders with L-III powers under CRC. Resourcing: As per MDT structure proposed. Outsourcing of services & empanelment to fill skill gap through fast track process as under. 

  

IOGPT – for Operations & Facilities IRS – Reservoir simulation & management IDT – Drilling/mud technology IEOT – GeoMechnical Stage Gate Gamij

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