Project Management in the Highly-Evolving Oil & Gas Industry

Posted by admin on 11/16/2020 11:01 pm  /   Home Page Highlights, Spotlights

Project Management in the Highly-Evolving Oil & Gas Industry

Mahesh Karnik, PMI Houston Contributor

 

Since March, I have filled my car with gas only three times. It's amazing to see how much less it cost me to fill my tank compared to last year or early this year. While oil prices are recuperating at a slow pace in recent days, oil and gas companies are focusing on projects delivering long term value whilst improving efficiency and reducing overall operating costs. From mergers and acquisitions to developing renewable assets, the message is clear - oil and gas companies are no longer wanting to be limited by producing and selling hydrocarbon. This shift in the strategy massively impacts the way projects will be approached. Some of these areas (i.e., renewables) are new and there is a need to learn and manage projects in this space rapidly. Exploiting digital capabilities, adopting agile, data science and analytical abilities, standardizing and harmonizing processes are key to achieve these objectives and are essential to how these companies deliver projects. Project delivery orchestration in the industry that is rapidly changing and deploying projects in an agile manner is the present and the future. Interestingly enough, project management roles don't even exist in an agile environment. However, project managers possess critical skills and their new role will look different from the traditional project manager role in the agile world.

Digitally enabled projects

From process to technology, Digital is at the heart of most O&G projects. From a project management standpoint, services like Portfolio Management, Product Management, Solution Management, Value delivery are far more important now than ever. It's important to follow a cycle of deploying projects on-time, replan based on outcomes and execute to success. Learning from this cycle is crucial as it lets the teams fail fast and course correct towards achieving the goals. A portfolio can consist of a product, service, project or a transformation that can deliver value. Product Management is key, from managing product vision to priorities. Product management should team lead this with inputs from various functional and business stakeholders. Solution teams are able to execute the service and help generate that value. It is a good idea to have value realization teams to ensure that business outcomes are tracked and business outcomes are met. All of these aspects need to be coordinated effectively. This is the job of the project manager, who is an integrator keeping these value streams together.

Agile Adoption

Agile has become the cornerstone delivery process for oil and gas organizations due to two key motivating factors. First, it facilitates speedy of delivery as you can focus on the highest-business-value use cases as you begin the project. Second, and most important, it provides a framework to solicit feedback from your end-users early & often, which in turn drives the business value for the customers. Project Management in the current age needs to address the gaps in agile delivery (resourcing, budgeting, etc.) focusing on delivery iterations and deliverables. From establishing governance, resourcing and funding models to managing scope, solution -project management is key. It plays into integrating all these streams in creating value delivery.

Data science and data analytical abilities

The oil and gas organizations are leveraging “Data Analytics”  to build models that can anticipate how they need to shift & adjust due to market conditions. This is a huge shift in how the organizations are relying on data to drive overall decision making and organizational transformation projects. From managing wells data in the upstream area to using big data analytics to reduce maintenance costs in the downstream area, data analytics are key. Project Managers can use predictive information to make informed decisions on schedule, manage scope, budget and quality effectively. The data-driven approach enables teams to analyze the data and understand specific patterns and trends. This will help project managers understand project patterns, early signs of risk, team efficiency and quality. Project management can use this analysis to guide teams on the activities and strategies they need to take to change course and realize that value.

Conclusion

Major oil and gas companies have begun their low-carbon emission transitions and are progressing towards digital maturity. The market for digital and data analytics is predictive to grow and Market Watch reports the “market for digital and data analytics is predictive to grow and per data collected by ‘Technavio’ global digital transformation in oil and gas market is poised to grow by USD 33.89 billion during 2019-2023”. Further, PMI’s own data shows that, through 2027, the project management-oriented labor force in several project-oriented sectors is expected to grow by 33 percent, or nearly 22 million new jobs. With Oil and Gas industry evolving, it is essential that the Project Management framework as we know it – need not change – but the overall application of PM governance and rigor has to be tailored based on the changing trends within each of the oil and gas industry due to the transformational nature of their journey.