Project Management in Oil and Gas Industry.

 

Assalamualaikum and Hi all,

We global issue on oil and gas on recession, all global oil & gas company need to diligently in handling theirs projects. All major company start to lay off some of their staffs and only maintain economical projects that to be done in year 2016. Now each of projects that need to be done in year 2016, need to run with optimise cost , schedule and scope.

All what we can see is that, the project management knowledge is crucial to make this happen. What I can say is that, we currently global recession in oil and gas business, all project managers need to enhance theirs skills and knowledge in handling projects. 

Some of the major company that already lay off their staff such as:

1.Shell plans to layoff 10,000 employees during merger as new statistics show employment in the U.S. oil industry has dropped by 100,000.

2.Shell Malaysia tops the list with a projected 1,300 job cuts in two years.

3.Petronas with a projected 1,000 job cuts in 2016.

Thus, in year 2016, we can foresee than handling projects much more tougher in oil and gas industry. With the current scenario, you need to run the project with smaller budget and less Project Management Team, as such previously 1 project we might have 50 pax member, but this year might only have 30 pax to handling the same size of project.

Let, during the project evaluation they put the return of investment (ROI) for the project with oil price $50 , but suddenly this year in January 2016, the price drop to below $30 which further impact to run on-going projects.

The slump price of oil starting Quarter 3 last year, and further decrease this year, mostly effected all big oil and gas company. It will reflect on how the way of each company handling the project. Also, with current scenario, to optimise the running cost, we saw a few company take plan to merger among their division or subsidiary, by having this theirs PMO will be integrated and manage by single point instead of previously each subsidiary do have their individual PMOs. Like Shell announces successful completion of BG merger. It is also capturing the plan for Halliburton to merge with Baker-Hughes. All the plan of merger for facing with trending of world oil price.

However something to ponder with, it is will be effective enough for all company or its subsidiary in oil and gas business to merge? We all know that in oil and gas business, we do have downstream business and upstream business. Typically we can say in project management, it can be done as well as we follow the overall project life cycle knowledge area. But the different will be handling the mindset and area of expertise for each of project managers and PMT.

The human resources will be play a big roles to make all the changes in any organisation to success. Without the acceptance from all workers in the company, the changes of the entire organisation as such merger will be not successfully as we tend to. Nevertheless, all the plan for merger shall be done details analysis and etc. In summary, it is crucial for all managers in oil and gas industry to equip themselves with knowledge in project management. 

This will help them  a lot in effectively managing theirs projects and can make sure the project success as define scope and complete as planned schedule. Honestly, I'm also understood with the current oil market price, it challenging for all of us to managing our projects, but rest assure with depth understanding in project management will make it better.

Thank You.

M Sahir B A Shatiry