EssaAnsari_DMSDebates - DMS Energy Forum: Debates

1st PMI AGC Energy Forum:
DMS Debates
NOCs in the GCC no longer need a PMC on a
Essa Al-Ansari
2nd June 2010
• Background
• PMT versus PMC
• Advantages of Owner PMTs versus
imported PMCs
Bapco is a unique company in comparison to
lots of other oil companies in the region and
possibly worldwide. Realising the lack of
engineering support in the region, Standard
Oil of California when it established Bapco in
1929 and thereon Caltex, organised the
engineering function along the lines of an
EPC service provider with certain services as
procurement, manufacturer base
development, manufacturing quality control,
process engineering services and capital
stewardship supported directly from its
London or New York offices.
Now Bapco is 100% owned by the
Government. However, lack of readily
available engineering contractors in Bahrain
due mainly to limited major projects
compared to the rest of the GCC countries
has forced Bapco to continue relying on its
in-house engineering in executing routine
engineering projects and directly managing
its major projects.
Bapco Engineering Division in its present
organizational and functional structure
provides EPC services to the Refinery and the
supporting facilities. Bapco Engineering
Division has a rich pool of experienced
engineers who are accustomed to and are
well versed in the Project Management
Also, as an offshoot of Bapco Engineering
Division, Major Engineering Projects (MEP)
Division serves as the Project Management
Office (PMO) to Bapco. MEP draws its project
management teams from the experienced
resources in Engineering Division.
GCC companies that have Engineering & EPC
services available easily within their reach
don’t have this thinking built into their
engineering departments and hence will not
benefit from the long term reliance on their
own permanent resources in managing their
projects, and hence obliged to rely on Project
Management Consultancy (PMC)..
PMT versus PMC …Cont’d
With this backdrop, Bapco has always been in
a strong position to provide teams to carry
out the Project Management Consultancy
(PMC) function. However, to achieve this
objective Bapco had to hire new engineers to
replace the resources in Engineering Division
to meet the requirements for our Project
Management teams. All selected members of
the Project Management are close to the
internal functions of Bapco and once the
project is completed they continue with their
roles in supporting the plant operation and
maintenance. Unlike PMC members whose
roles will finish with the project completion.
PMT versus PMC …Cont’d
The outsourcing of Project Management
Services to Project Management Consultancy
Companies can be a double edged sword.
There are many disadvantages of the PMC
approach. The application of this strategy
must be weighed very carefully before a
commitment is made.
PMT versus PMC …Cont’d
A professional project manager is not merely
a technically sound person; he has to
possess business management expertise,
project management protocol knowledge,
and experience in facilitation. He should be
capable to rise above the internal political
framework of the country and the company
for which he is managing the project. He
must understand the culture of the company
for which the project is being delivered. The
same applies, to a lesser degree, to the rest
of the Project Team Members. .
PMT versus PMC …Cont’d
Owner companies who wish to stay
competitive must assess internal capabilities
to achieve what we have done in Bapco to
deliver the necessary project engineering
design quality and develop their internal
local resources by entrusting them with the
full responsibilities of directly managing
projects. Bapco can never rely on PMCs to
achieve these objectives.
Advantages of Owner Project Management
Teams versus imported PMCs
The following are the advantages of the
dedicated cross functional Owner Project
Management Teams versus imported PMCs:
Complete control over the project staff
resource allocation and assignments
The Project Management Team members
fully understand the requirements and the
design philosophies of the Company besides
the standards and specifications
Communications with stakeholders are
timely and more effective due to long term
Advantages of Owner Project Management
Teams versus imported PMCs …Cont’d
Core competencies in the Project
Management Team understand the
geographic impacts on the project such as
remoteness from manufacturing sources etc
Core competencies in the Project
Management Team understand the politics of
the game impacting the project approval
processes, decisions etc
Site specific requirements for HSE are readily
integrated in to the project
Offers opportunities for the internal
resources to interact with major engineering
contractors and learn from the experience 13
Advantages of Owner Project Management
Teams versus imported PMCs …Cont’d
Improves the agility of the participants as
quick decision making is necessary to
progress the work
Technology transfer is achieved for the long
term benefit of the Company
This process enhances the internal company
culture and skill sets of internal team leaders
Internal processes and procedures are easily
tailored to suit requirements post delivery of
the project
Early completion value is added by
improving start up/commissioning and
training needs
Advantages of Owner Project Management
Teams versus imported PMCs …Cont’d
Unlike PMC staff whose functions end with
the project completion, owner project team
members have long term commitment and
accountability to the onward successful
operation and maintenance of the plant. This
factor will impact many design and material
selection decisions impacting final plant
safety and reliability
Financial saving of the PMC cost due to
duplication of resources as owner will still
have to maintain a core project team to
interact with and manage the PMC
Thank you !
Q & A !