Learn how to manage Oil and Gas project timelines effectively when facing market fluctuations and delays in this insightful article.

Quando as notícias não são favoráveis, a transparência torna-se ainda mais importante, uma vez que o primeiro passo para solução dos problemas é deixar explícito que eles existem e precisam ser resolvidos o quanto antes para não frustar as expectativas.

Last updated on Aug 13, 2024

Dealing with project delays in Oil and Gas. Worried about market fluctuations impacting your timeline?

In the dynamic world of Oil and Gas, project delays can be a significant hurdle. Market fluctuations are a reality in this industry, often causing timelines to stretch unexpectedly. You might find your project's schedule is at the mercy of changing oil prices, regulatory shifts, or supply chain disruptions. It's essential to understand that while these factors are outside your control, your response to them is not. Effective strategies can help you mitigate the impact of delays and keep your project on track as much as possible. Let's dive into how you can tackle these challenges head-on.

1 Risk Assessment

Before you break ground on any Oil and Gas project, a thorough risk assessment is crucial. This involves identifying potential delay factors like market volatility, regulatory changes, or environmental concerns. By understanding what could go wrong, you can develop contingency plans. These might include securing multiple suppliers to avoid disruptions or locking in prices with contracts to protect against market swings. Proactive risk management is your best defense against the unpredictable nature of the industry.

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Frank Ashford

Retired Contract Instructor John M. Campbell & Co.
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Before developing a field and placing production facilities into play , there are countless important parameters , or local / national issues to evaluate: 1) previous analysis should have been made to both quantify and qualify the HC components to be produced. 2) if CO2 , and or H2S are projected to be in well stream; insure that facilities exist to handle these Aromatics. 3) insure that any contaminants have treatment functionality. 4) be sure to have good information regarding producing components: is the oil compatible with other streams or proper downstream facilities. 5) if the oil/gas/water have associated sand the issues become serious. Operators must decide. Sand elimination facilities are critical issues to resolve.

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2 Flexible Planning

Flexibility in planning is your ally when facing project delays. This means creating a project timeline that allows for adjustments as conditions change. For instance, if you anticipate a possible change in regulations, plan for an extended permitting process. Similarly, if market prices are volatile, consider how this could affect your financing or procurement strategies. A flexible plan is like a roadmap with multiple routes, ensuring you can navigate around obstacles without losing direction.

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Maxwell Brandão de Cerqueira

Consultor Sênior e Professor de Engenharia Submarina
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O planejamento é de suma importância para o gerenciamento, monitoramento para saber se o andamento diário está indicando um possível atraso, possibilitando uma mudança de estratégia o quanto antes. Isto certamente dará mais chances de, ou não deixar o atraso ocorrer, ou mitigar o impacto.

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3 Communication Channels

Open and effective communication channels are vital when delays strike. You need to keep all stakeholders, from investors to contractors, informed about any changes to the project timeline. Clear communication can prevent misunderstandings and maintain trust, even when news isn't favorable. To facilitate this, establish regular update meetings and use project management tools that allow real-time updates. Transparency is key to managing expectations and collaborating on solutions.

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Maxwell Brandão de Cerqueira

Consultor Sênior e Professor de Engenharia Submarina
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Quando as notícias não são favoráveis, a transparência torna-se ainda mais importante, uma vez que o primeiro passo para solução dos problemas é deixar explícito que eles existem e precisam ser resolvidos o quanto antes para não frustar as expectativas.

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4 Cost Management

In the face of delays, keeping a tight rein on costs becomes even more important. Monitor your project's budget closely and look for areas where expenses can be trimmed without compromising safety or quality. For example, if a delay means that equipment is sitting idle, renegotiate rental contracts or seek alternative uses for the equipment. Effective cost management helps ensure that when delays occur, they don't lead to financial overruns that could jeopardize the entire project.

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5 Legal Strategies

Understanding the legal implications of project delays is essential. This includes knowing your rights and obligations under contracts, especially regarding delays caused by external factors. If market fluctuations delay your project, check your contracts for force majeure clauses or other provisions that might relieve you of certain responsibilities. Having legal strategies in place can provide a buffer against the ripple effects of delays, protecting your project from potential disputes or penalties.

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6 Adaptation Tactics

Finally, being able to adapt to changing circumstances is a hallmark of successful Oil and Gas operations. This could mean shifting resources to different parts of the project that aren't affected by the delay or finding new suppliers in response to market-induced shortages. Adaptation might also involve revising project goals or outputs to align with the new reality. Whatever form it takes, the ability to pivot and adapt is crucial for keeping your project moving forward despite delays.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Dariush Daraee

ULTER Solutions COO | Lecturer @ University Canada West | Oil & Gas Executive MBA, PMP
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Reflecting on my 26 years in oil and gas projects in Iran, beyond financial and stakeholder management, “EPC logistics” demanded my constant focus: 1. Material and Equipment Procurement: • Delays in sourcing specialized long-lead equipment (often due to sanctions) • Transportation logistics: shipping, trucking, and air freight, with “piping material” as a critical component. • Customs clearance and import/export regulations. 2. Construction Site Logistics and Mobilization: • Mobilizing and demobilizing construction crews and equipment, especially heavy loading cranes. • Site access and transporting heavy or oversized loads. 3. Engineering and Seismic Logistics: • Delays in transporting and setting up seismic survey equipment.

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Dealing with project delays in Oil and Gas. Worried about market fluctuations impacting your timeline?

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1 Risk Assessment

2 Flexible Planning

3 Communication Channels

4 Cost Management

5 Legal Strategies

6 Adaptation Tactics

7 Here’s what else to consider

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