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Strategies for Mega Projects Outlined

Source: 10/3/2006, Location: Middle East

Saudi Aramco general manager of Area Projects Mohammad A. Al-Juwair said the company's ability to execute mega projects with consistently high quality comes from years of continuous learning from its past projects.

Al-Juwair noted that due to the recent rise in demand for energy, Saudi Aramco is engaged in the largest expansion program in its history, encompassing crude oil production, refining and petrochemicals production. Saudi Aramco currently has approximately 150 active projects, ranging in cost from $2 million to $10 billion. Of that number, Al-Juwair noted, five are mega projects.

To get to where Saudi Aramco is now in its ability to execute mega projects, Al-Juwair recounted experience gained during past efforts, including the Ras Tanura Refinery upgrade (1998), the Shaybah Field Development (1998), Hawiyah Gas Plant (2001), Haradh Gas Plant (2003), and the Qatif Crude Increment (2004).

Al-Juwair singled out the Ras Tanura project as a turning point in the company's mega-projects management, as the results were mixed. "Although some of our contract packages for this project had degrees of success, I have to be honest here, we still had many uphill challenges," he said. "The experience gave us a world of lessons learned that we could build on."

Al-Juwair noted that Saudi Aramco's "Lessons Learned" process has evolved into a web-based, user-friendly system that is methodical and detail-oriented. Lessons are collected through a series of facilitated workshops, followed by an analysis of these lessons by a team of subject matter experts. Finally, these lessons are implemented into new projects by another series of facilitated workshops.

Al-Juwair said the Ras Tanura project was the impetus for Saudi Aramco's project-management improvement process, and was immediately applied to the challenging Shaybah 500,000 bpd crude oil increment in the Rub' Al-Khali Desert, which was begun in late 1995.

Continuous learning led to continuous improvements on the subsequent Hawiyah and Haradh Gas Plants, followed by the Qatif 800,000 bpd crude oil development.

"So, as we have matured in the process, we have seen shorter schedules, lower costs, higher quality, increased safety and deeper learning in both our own workforce as well as those of our contractors and suppliers," Al-Juwair said.

The efforts have also paid off in terms of recognition for the company's efforts. The Project Management Institute awarded Saudi Aramco its "Project of the Year" award in 2002 and 2004, for the Hawiyah and Haradh Gas Plants, respectively.

The Construction Industry Institute presented Saudi Aramco with its "Benchmarking User" award in 2002, and its "Implementer of the Year" award that same year for the company's use of industry best-practices.

Al-Juwair concluded his presentation by discussing the mega-project challenges currently facing Saudi Aramco, including:

- The Hawiyah NGL Recovery Plant - 310,000 bpd of ethane and NGL
- Khursaniyah Field Development - 500,000 bpd crude and 1 billion scfd associated gas
- Khurais Field Development - 1.2 million bpd crude and 420 million scfd associated gas
- Shaybah Field Expansion - 250,000 bpd crude increase
- Manifa Field Development - 900,000 bpd crude and 120 million scfd associated gas

"Certainly these projects will pose significant challenges, given today's scarcity of skilled engineering and construction resources, longer delivery times for commodities, prices of goods that continue to fluctuate above normal, and keen competition for experienced engineering firms and construction contractors," Al-Juwair noted.

"However, building on our past record of planning and executing mega projects under challenging circumstances, we are confident that we will be successful," he added.

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