SECTION A [40 Marks] Read the article below and answer ALL the questions that follow. LARGE PROJECT MANAGEMENT IN OIL AND GAS As activity ramps up and more oil and gas production move to frontier and unconventional resource areas, projects are becoming larger and more complex. These include an offshore facility in the Arctic, budgeted at more than $3 billion, and an $8.4 billion petrochemical complex spread across 45 kilometers in South America. Such projects involve many stakeholders, including shareholders, local authorities and regulators, and environmental and community advocates and they are also exposed to quality misshapes. Schedules are compressing, too: For one oil company, more than 90% of its field discoveries from 2009 to 2011 are due online in less than eight years. Of course, no company manages only one project at a time. Firms portfolios may include hundreds of complex projects, which they prioritize not only on financial goals and risks (including execution, commercial, health safety-environmental and reservoir risks), but also increasingly based on the availability of scarce resources like engineering talent. Some are building up their internal engineering staffs by as much as 80% to effectively manage the many contractors and suppliers on each project. Scoping projects accurately is an important skill. For small companies, delivery of a smaller, technically complex project may be as demanding as larger projects are for large companies. However, projects that look very big (for example, upstream shale production projects) may in fact be a collection of smaller projects. Companies that approach their unconventional strategy in the same way they would approach a large, complex project run the risk of over-engineering their upstream production if they treat many small projects like a large one.

- A framework to meet these challenges Following a robust project reference framework can help avoid cost and schedule overruns together with various project quality related challenges. Leading companies gather technical input early, incorporating it into the projects framework to make sure it aligns with the organizations larger goals. They also engage stakeholders throughout the life of the project, from architecture and design through execution. Well-managed large projects balance simplicity and flexibility with respect for rigor at checkpoints. While its important to keep project teams on task and schedule, processes that are not easily changeable can place unnecessary hurdles in a projects path. - Clear accountability in an integrated project team Successful projects require effective decision making. Our analysis of projects that run late or over budget and are characterised with quality issues is as a result of not making good decisions with the right people and not making them happen. This may include failing to invite technical input at the concept phase, disregarding stakeholders or misaligning decision makers incentives and project goals. An integrated project team with clear roles and responsibilities, and a shared interest in the projects objectives, helps ensure accountability. In some organizations where decisions and accountability are not clearly allocated to project teams, functional experts may wind up making key decisions.

- Competency development across capabilities A good framework is essential, but its not enough to satisfy the demands of major projects in oil and gas. Companies must also continuously improve their general project management skills, balancing trade-offs among costs, schedules, technical demands and stakeholder requirements while also coordinating between the functional center and project. Managing risk and opportunity is a continuous process that requires companies to consider not only the most common risks, but also to have experience mitigating unexpected events. In the oil and gas industry, its never been more important to manage health, safety and environmental risks, given the rising complexity of operations and the close scrutiny by regulators and stakeholders. Engineers and builders in the oil and gas industry face daunting and unprecedented challenges as they design and construct the infrastructure to extract and process the resources that will power the global economy over the next few decades. Few large projects in the planning stages will stand the test of time like the Colosseum. But that doesnt diminish their importance or suggest they should be undertaken with any less rigor. As the oil and gas industry embarks on a new generation of major projects, project managers will need to rely on coherent, consistent reference frameworks that guide their decisions and engage the most competent talent they can find in order to keep pace.

QUESTION 1 1.1 In the context of the large oil and gas projects, discuss any core areas that project managers should emphasise on in an attempt to improve on their overall project quality. Your response should make use of relevant examples. (20 marks)

1.2 Successful projects require effective decision making. As provided in the article, projects that run late and that are characterised with quality issues are mainly because of the failure to make good decisions with the right people. Taking this into consideration, critically discuss the main ingredients that should be taken into account by project managers when putting together a project quality plan.