Case Study 1 Managing Kuwait Oil Fields Reconstruction Projects

T he Iraqi invasion of Kuwait took place in August of 1990 with the liberation in February 1991 following the Gulf War. Almost all of the country's oil production facilities suffered extensive damage. The Kuwait Oil Company's (KOC) oil field reconstruction project that was planned, executed, and managed by Bechtel International was actually conceived in November 1990 in London, England. Planning and organizing the reconstruction of the oil facilities continued throughout the war in London, Houston, San Francisco, Dubai, and Riyadh. This was during the occupation but prior to the liberation. No one knew at that time what the true magnitude of the work would be; however, some tasks could be identified and front-end planning and procurement for these tasks started immediately. The scope of the restoration work was obviously increased tremendously by the damage incurred from the oil field fires that started at the end of the war. Bechtel project management personnel arrived in Kuwait on March 4, 1991, three days after the allied troops had completed their initial sweep of Kuwait City. The main objective of this team was to organize and manage the fire-fighting effort, This phase of the project was named Al-Awada (Arabic for return). The vivid scenes shown by the newspaper, magazine, and television reports came alive for Bechtel project personnel. The days were dark with smoke from the fires blocking the sun, oil droplets filled the air, clean water and sanitary systems were not working, power plants were down, transportation was minimal as tires were a precious commodity, and food was very scarce. Initial accommodation was in refurbished ship quarters and in some vandalized apartment complexes without water and electricity, no more than a foam mattress on the floor, and a long hike up a darkened staircase. In addition to these problems, booby traps, land and water mines, unexploded shells and rockets, and other ordnance had littered the country. The temper- . atures in summer consistently were above 50" C in shade (seldom below 37" C at night), exposing the people in the field to temperatures of 55-58" C in many locations, and hotter nearer to the fires. Just providing drinking water was a major undertaking. John Oakland, senior vice president of Bechtel Corporation, who served as the manager of projects in Kuwait, remarked, "This campaign, which was well covered by the international news media, was one of the most complex engineering and construction efforts in history (I)." However, the following assignment, which was the reconstruction of the Kuwait oil fields, was an even bigger and more challenging task. The project management of the oil production facilities reconstruction, which was named Al-Tameer (Arabic for rebuild), is the subject of this report.

Status of the Facilities

The state of the two million bpd oil export industry in Kuwait after the completion of the fire-fighting effort was as follows: Six-hundred-forty-seven wells had burned in total, 75 1 wells were damaged. Twenty-six oil gathering, separation, and production centers were damaged or totally destroyed. One marine export facility and its related single point mooring was totally destroyed, and the second marine export facility was partially damaged and out of commission. The equivalent of ten million barrels of crude oil storage tankage had been destroyed. The Shuaiba refinery was totally destroyed. A crude unit in the Mina Al Ahrnadi Refinery was completely destroyed. The rest of the refinery was partially damaged and the refinery was out of commission. The Mina Abdullah Refinery was partially damaged and the units were not operable. All communication towers and networks were destroyed. Most of the working population had either

Al-Tammeer Project

After the successful completion of the fire-fighting effort, KOC invited Bechtel to present its plan for the reconstruction of the oil fields production and exporting facilities damaged during the war, starting work by November 1990. KOC's goal was to be able to produce 2 million bpd of oil by September 1992.

Study questions

1. Summarize the case ,project was a major undertaking. The challenges it faced ranged from providing the basics for being able to live in the desert (water and shelter) to finding creative methods for getting imports into the country through non-traditional routes. From the author's point of view, the project went rather smoothly. To which factors do you attribute the success of this project? (4marks)