Category Archives: Mohammed

W8_Mohammed_Production Expansion


Problem definition

The Government has directed the company to increase the company oil production rate by additional 40,000BOPD before end of 2013 as per the encourage exploration results. As facility department our role is to decide which facilities needed to cover such expansion. The required facilities and the alternatives are the main challenges which are answered in the below Blog. The blog will highlight in brief the required WBS as per the proposed scope for the proposed options.

Development of the feasible alternatives

The targeted area is divided to two parts with respect of location and reservoir quantities expected, the facilities were proposed as following:

Scenario 1: Build one FPF with capacity covering the production of two areas.

Scenario 2: Build small capacity FPF in each area.

 

Analysis and comparison of the alternatives

Scenario 1: Development of AREA-1

  1. AREA-1 & AREA-2 Field Surface Facilities (FSF) i.e. wells,  OGM and trunk line to Hadida FPF
  2. AREA-1 FPF.
  3. Transit line from AREA-1 to CPF, for LC & HC. Design capacity is 40,000 BOPD. At least one middle pump station shall be considered for future.
  4. Consider 2 phases: short term or early production and long term. The early production is to export qualified 10,000 BOPD of LC from
  5. Power Generation Plant and Distribution for FPF and other FSF Requirements.
  6. Instrumentation, Control Philosophy &Telecommunication
  7. Expansion in the Central Processing Facilities (CPF) to handle the extra fluid

Scenario 2: Development of AREA-1 & Area-2, Will be same as above, in addition to the following:

  1. AREA-2 FPF
  2. Transit Line from AREA-2 to AREA-1
  Development of AREA-1 WBS     Development of AREA-1 & 2 WBS
1.0 Crude Expansion Projects    1.0 Crude Expansion Projects
1.1 Conceptual design 1.1 Conceptual design
1.2 Basic design 1.2 Basic design
1.3 Long Lead Items 1.3 Long Lead Items

1.3.1

Compressors

1.3.1

Compressors

1.3.2

Line Pipe

1.3.2

Line Pipe
1.4 Pre-Award Phase (Tendering and Award) 1.4 Pre-Award Phase (Tendering and Award)

1.4.1

Issuing of ITB

1.4.1

Issuing of ITB

1.4.2

Bid Evaluation

1.4.2

Bid Evaluation

1.4.3

Shareholders & Government Approvals

1.4.3

Shareholders & Government Approvals

1.4.4

Award

1.4.4

Award
1.5 Post Award Phase (EPCC & PCC Projects) 1.5 Post Award Phase (EPCC & PCC Projects)
1.5.1 Central Processing Facility Expansion (PCC) 1.5.1 Central Processing Facility Expansion (PCC)

1.5.1.1

Procurement

1.5.1.1

Procurement

1.5.1.2

Construction

1.5.1.2

Construction

1.5.1.3

Commissioning

1.5.1.3

Commissioning
1.5.2 EPCC for Field Processing Facility of AREA 1 1.5.2 EPCC for Field Processing Facility of AREA-1

1.5.2.1

Engineering

1.5.2.1

Engineering

1.5.2.2

Procurement

1.5.2.2

Procurement

1.5.2.3

Construction

1.5.2.3

Construction

1.5.2.4

Commissioning

1.5.2.4

Commissioning
1.5.3 EPCC for Pump Station (EPCC) 1.5.3 EPCC for Pump Station (EPCC)

1.5.3.1

Engineering

1.5.3.1

Engineering

1.5.3.2

Procurement

1.5.3.2

Procurement

1.5.3.3

Construction

1.5.3.3

Construction

1.5.3.4

Commissioning

1.5.3.4

Commissioning
1.5.4 PCC for Field Surface Facility (AREA-1 & AREA-2) 1.5.4 PCC for Field Surface Facility (AREA-1 & AREA-2)

1.5.4.1

Engineering

1.5.4.1

Engineering

1.5.4.2

Procurement

1.5.4.2

Procurement

1.5.4.3

Construction

1.5.4.3

Construction

1.5.4.4

Commissioning

1.5.4.4

Commissioning
1.5.5 Transit Line from AREA-1 to CPF (170km) 1.5.5 Transit Line from AREA-1 to CPF (170km)

1.5.5.1

Engineering

1.5.5.1

Engineering

1.5.5.2

Procurement

1.5.5.2

Procurement

1.5.5.3

Construction

1.5.5.3

Construction

1.5.5.4

Commissioning

1.5.5.4

Commissioning
    1.5.6 Transit Lines from AREA-1 to 2 (20km)
   

1.5.6.1

Engineering
     

1.5.6.2

Procurement
     

1.5.6.3

Construction
     

1.5.6.4

Commissioning
      1.5.7 EPCC for Field Processing Facility of AREA-2
     

1.5.7.1

Engineering
     

1.5.7.2

Procurement
     

1.5.7.3

Construction
     

1.5.7.4

Commissioning
         

Selection of the preferred alternatives

From the above WBS its shown that the only difference is in the additional FPF of AREA-2 and the additional transit line from AREA- to AREA-1, but actually, there are many differences are not shown i.e. The difference in the capacities which are resulted in the difference in the scope and accordingly the cost estimate which changed from one scenario to another.

Following the same WBS, the estimation were done for both scenarios and we found that it is better to go for scenario two but in two phases, firstly to build only one FPF and later to construct the second one. The conceptual study is on progress and the results of our decision will be clearer after getting the result of the conceptual study.

Performance monitoring and the post evaluation of results

The result of the chosen option will be determined after the conceptual study.

 

Conclusion

The company has taken the risk and concentrates on the second scenario considering it’s the most optimum choice and its added value more than the first scenario.

 

References

* Humphreys & Associates, Project management using Earned Value.

* W14_ADI_WBS Development for conceptual study phase of project

W7_Mohammed_when should i start building my own house


Problem definition

 

I bought my own land two years ago through bank. Now it’s the time to think about building this land, this analysis will guide me through to the best time / year to start this capital investment in the contraction of my own house considering the material prices & available fund.

 

Development of the feasible alternatives

 

As estimation its need not less than 100,000USD as to complete one story building given that the land is already available, Here is the evaluation of my possible choices to start the construction of my house, my strategy is to save much I the beginning and then pay the balance in installments, the plan could be started in one of the below options:

1. End of 2012

2. End of 2013

3. End of 2014

 

Analysis and comparison of the alternatives

 

Considering that the construction will take around 6 months to one year as an average, the above three options have been evaluated according to the following factors:

-My savings:

1. By end of 2012 ——- I may start with 100,000SDG = 40,000USD

2. By end of 2013 ——- I may start with 140,000SDG = 55,000USD

3. By end of 2014 ——- I may start with 180,000SDG = 70,000USD

-Inflation trends in Sudan based on the central bank of Sudan records were given as 16%.

 

Selection of the preferred alternatives

Considering the time value of money and the inflation rate in Sudan from the central bank of Sudan, by using the relating present and future equivalent values of single cash flows, as follows:

F = P (1+i)ᴺ

 

Given that:

F:         Future single sum

P:         Is the present Value

i :          inflation or interest rate

N:         Period

 

Solution

Back to the above options:

 

P:         The nowadays estimation of 100,000USD is needed to complete one story building given

i:           an average of 16% as per the Central Bank of Sudan records

 

1. End of 2012:

F = P (1+i) ᴺ

   = 100,000 (1+0.16)¹

   = $116,000

Considering that I’m planning to save $40,000 by end of 2012 then the difference is going to be $76,000

 

2. End of 2013:

F = P (1+i) ᴺ =

                           = 100,000 (1+0.16)²

                           = $134,560

Considering that I’m planning to save $55,000 by end of 2013 then the difference is going to be $79,560

 

3. End of 2014:

F = P (1+i) ᴺ =

                           = 100,000 (1+0.16)³

                           = $156,089

Considering that I’m planning to save $70,000 by end of 2012 then the difference is going to be $86,089

 

 

Conclusion

 

It’s clear that I should plan for 2012 since the difference is the least among the other options of 2013 and 2014.

 

References

*  Engineering Economics-Fifteen Edition, chapter 4, Relating Present and Future Equivalent Values of Single Cash Flows, page113

 

W6_Mohammed_Run WayExtension


Problem definition

Should our company extend the under construction Run Way?

Development of the feasible alternatives

Our company received a request from the government to extend the under construction runway for another 1km. Our company has to right to accept or reject this request. But in other hand our company is looking to the benefit and cost of this project ie.operate a large size jet aircrafts instead of the small size aircraft operated now; this will save mainly save the time and the cost of the flight, but the cost of this extension is rather high. Here I’m using the conventional Benefit–Cost Ratio method to make go/no-go decision on the RW extension.

 

 

Analysis and comparison of the alternatives

-The cost of extending the runway additional 1000 m includes supply and process of earthworks, asphalt works, fence extension, and extension of AFL system and Compensation of lands. The cost estimation as per current market price for runway extension is about $6,000,000 including but not limited to (land Compensation Cost, EPCC cost: is excavation, BF, asphalt works, marking system, Fence System, AFL system).

-An annual estimated saving to company is estimated 800,000USD plus per year, moreover saving a lot of time per flight, considering using Jet Aircrafts (50 seats) or even Boeing 737 (126 seats) which will need only 45min to reach the field airport from Khartoum airport, instead of using only Dash8, Fokker 50 which need about 2 hours to reach our field airport.

-There is about 300,000USD for maintenance per year (maintenance of asphalt, marking, and lighting).

-Lifetime is 30 years

-International finance interest rate 6%

(A/P,6%,30) = 0.07265

B-C      = AW (benefit of the proposed project) / AW (total costs of the proposed project)

            = AW (B) / CR+AW (O&M)

Where:

AW (B) = Annual worth of benefit of the proposed project

CR         = Capital recovery a mount

O&M   = Operating and maintaince cost of the proposed project

At the interest rate of 6% per year the conventional B-C ratio of the proposed R/W extension is

B-C= 800,000 / [6,000,000 (A/P, 6%, 30) + 300,000] = 1.04

Selection of the preferred alternatives

Based on the above results, which shows the B-C > 1 its recommended that the company should take the decision of go and do the R/W extension.

 

 

Conclusion

The cost Benefit Ratio method is an interesting procuders for making go/no-go decision on independent projects. Applying this method to the proposed project company can easily decide to go on for the extension of the under construction R/W.

 

 

References

*  The benefit-Cost Ratio Method P429, Engineering E economics 15th Edition

W5_Mohammed_What the time needed for creating W10, W20, W30 Blogs


Problem definition

What is the daily time required to create my week 10, 20, 30 Blogs? As a challenge from Dr.Paul and to answer this question, I have applied the LEARNING CURVE THEORY in a reference to my W4 blog, so I can predict how it will take me for my W10? W20? W30 blog posting?

Development of the feasible alternatives

A. Time for W10

B. Time for W20

C. Time for W30

Analysis and comparison of the alternatives

As the conclusion of my blog per the best case worst case, most likely scenario graph, taking a percentage of 90% as the most likely case, I shall spent not less than 110 min on daily basis to do a quality blog. This amount will be the base of the calculation of this analysis, considering that 110 min is the average daily rate needed to create my first blog “W1”, with a 90% improvement or (learning rate). This analysis will use the spread sheet analysis.

K =

110 min The number of input resources (min/day) needed to produce the first Blog

s =

80% The learning Curve slope

 

     

n =

-0.322 The learning Curve exponent
       

Blog Number

Unit min/daily

Cumulative Total

Cumulative Average

1

110.00

110.00

110.00

2

88.00

198.00

99.00

3

77.23

275.23

91.74

4

70.40

345.63

86.41

5

65.52

411.15

82.23

6

61.79

472.94

78.82

7

58.79

531.73

75.96

8

56.32

588.05

73.51

9

54.22

642.27

71.36

10

52.42

694.69

69.47

11

50.83

745.52

67.77

12

49.43

794.95

66.25

13

48.17

843.12

64.86

14

47.04

890.16

63.58

15

46.00

936.16

62.41

16

45.06

981.22

61.33

17

44.19

1025.40

60.32

18

43.38

1068.78

59.38

19

42.63

1111.41

58.50

20

41.93

1153.34

57.67

21

41.28

1194.62

56.89

22

40.67

1235.29

56.15

23

40.09

1275.38

55.45

24

39.54

1314.92

54.79

25

39.03

1353.95

54.16

26

38.54

1392.48

53.56

27

38.07

1430.55

52.98

28

37.63

1468.18

52.44

29

37.21

1505.39

51.91

30

36.80

1542.19

51.41

 

 

 

 

 

 

 

Selection of the preferred alternatives

As per the best LEARNING CURVE THEORY shown in the above graph, assuming 80% learning curve, it’s indicated that I will need about 70 min/daily to complete the Blog of Week 10 and 58 min for Blog of Week20 and finally 51 min for Blog of Week 30.

 

Performance monitoring and the post evaluation of results

I will continue monitor the time needed to create such a good blog, so I can determin if its matching my analysis or not.

Conclusion

The learning Curve theory, gives a clear prediction to what time needed to perform a task. In my case above I will need about 70 min/daily to complete the Blog of Week 10 and 58 min for Blog of Week20 and finally 51 min for Blog of Week 30

 

References

* Engineering Economics-Fifteen Edition, chapter 3 pages 86-89, LEARNING CURVE THEORY.

W4_Mohammed_What the real time I should spent for creating an acceptable Blog


 

 

Problem definition

What is the daily time required to create my weekly Blog. I have learned by experience that the best time is 30 min daily, although the longest time I spent is 120 min per day, but most likely I can complete the blog in 90min daily. To determine the suitable time needed to do a quality blog, here I consider the best case worst case, most likely scenario to get an answer.

Development of the feasible alternatives

I was spending more or less between the following durations:

A. 45min

B. 90min

C. 120min

 

Analysis and comparison of the alternatives

 

  Best Case Worst Case Most likely
Average 45 min 120 min 90 min

 

First: Calculation of the Pert duration:

(Optimistic Dur + 4* Most likely + Pessimistic Dur) / 6

The Mean Duration is = (45+4*90+120) / 6 = 525/6 = 87 min

Second: Calculation of the Standard Deviation and the Variance

120 (Pessimistic) – (Optimistic) 45 = 75 min

Sigma = 75/6 = 12.5

Variance = (12.5)² = 156.25

 

Selection of the preferred alternatives

As per the best case worst case, most likely scenario graph shown above, taking a percentage of 90% as the most likely case, I shall spent not less than 110 min on daily basis to do a quality blog.

 

Performance monitoring and the post evaluation of results

Spending an average of 110 min is facilitating my W3, since it was issue in short time and good quality. comparing with W1 & W2 blogs.

Conclusion

The time needed for creating and developing a good blog is vary depend on the topic and the time should be spent on daily basis, taking my case I found that it’s better to spent not less than 110min daily as to get my blog done on the exact target date.

 

References

* AACE certification Preparation Course 2011, Day2 P 64/105, Dr. Paul D. Giammalvo.

 

W3_Mohammed_Continue or not with a Contractor who failed to complete the project many times


 

Problem definition

The NEW AIRPORT Project has been started on Aug 2008 with 13 month duration; unfortunately the contractor has failed to complete the project in the same duration. Various MCD dates were given with no positive results. This analysis will calculate which decision the CLIENT has to consider.

 

Development of the feasible alternatives

Option 1: Continue with the Contractor
Option 2: Terminate the Contract, and start new bidding
Option3: Assign part of scope to new contractor without termination with the main contractor

 

Analysis and comparison of the alternatives

Table 1-1 Summary of information for the given options

Attribute

Continue with same Contractor

Terminate & start new Bidding

Assign part of scope to new contractor without termination

Estimated Cost

$3.5M

$8M

$6M

Estimated Time

8.25 months*

9 months**

6 months***

Financial Capability

Fair

Excellent

Excellent

Quality due to interface

Excellent

Good

Good

Risk of Failure****

High

None

None

Interface issues****

None

High

Moderate

Dispute Expected****

None

High

Moderate

Note: Bolded selcetion represent the best value.

* Contractor completed 80% in the period from Aug2008 till Aug2011which is Equal to 36months, considering that the project was suspended by the owner for three months so the total duration spent by contractor is 33 months. Therefore the completion of 20% remaining could be estimated as per the contractor progress as follows:
80% —————– 33 months
20% —————– X months
So X = (20% * 33)/80% = 8.25 months

**Considering: 5 month for bidding & 1 month for mobilization and 3 months for work execution  = 9 months

***Considering: 2 month for preparation of scope & 1 month for mobilization and 3 months for completion of remaining works = 6 months

****Its decided for Risk of Failure, Interface Issues & for Dispute Expected the following ranking:  None >Moderate>High

 

Selection of the preferred alternatives

Table 1-2 Nondimensional Scaling for the given options

Attribute

Value

Rating Procedure

Dimensionless Value

1. Estimated Cost

$3.5M

(8-cost)/4.5
(8-3.5)/4.5


1.0

 

$6M

(8-6)/4.5

0.4

 

$8M

(8-8)/4.5

0.0

2. Estimated Time

6 months

(9-Duration)/3
(9-6)/3


1.0

 

8.25 months

(9-8.25)/3

0.3

 

9 months

(9-9)/3

0.0

3. Financial Capability

Fair

(relative rank-1)/1(1-1)/1


0.0

 

Excellent

(2-1)/1

1.0

4. Quality (due to interface)

Good

(relative rank-1)/1
(1-1)/1


0.0

 

Excellent

(2-1)/1

1.0

5. Risk of Failure

None

(relative rank-1)/1(1-1)/1


0.0

 

High

(2-1)/1

1.0

6. Interface issues

None

(relative rank-1)/2(1-1)/2


0.0

 

Moderate

(2-1)/2

0.5

 

High

(3-1)/2

1.0

7. Dispute Expected

None

(relative rank-1)/2(1-1)/2


0.0

 

Moderate

(2-1)/2

0.5

 

High

(3-1)/2

1.0

 

Table 1-3 calculation of the best choice, Nondimensional Scaling

Attribute

Continue with same Contractor

Terminate & start new Bidding

Assign part of scope to new contractor without termination

Estimated Cost

1.00

0.0  

0.40

Estimated Time

0.30

0.0  

1.00

Financial Capability

0.0  

1.00

1.00

Quality due to interface

1.00

0.0  

0.0  

Risk of Failure

0.0

1.0

1.0

Interface issues

1.00

0.0 

0.50

Dispute Expected

1.00

0.0  

0.50

SUM =

4.30

2.00

4.40

     

 Best Choice

 

Conclusion

Based on the above analysis, the best choice has to be adopted by the company is to assign part of the scope to a new contractor without termination of the contract with the original contractor. This will save a lot of time and money.

 

References

* Engineering Economics-Fifteen Edition, chapter 14, Decision Making Considering Multiattribute, Compensatory Models, page560.

 

W2_Mohammed_Reasons behind change orders in Sudan


 

 

Problem definition

 

A change order/request is the formal document that is used to modify the original contractual agreement and become part of project’s documents. Change order/request is a request needed to obtain formal approval for changes to the scope, designs, methods, costs, or planned aspects of a project. This paper highlights briefly the most common causes for change requests/orders in oil & gas projects and mainly in Sudan, by using cause & effect fishbone diagram.

 

 

Development of the feasible alternatives

 

  • The project’s work was incorrectly estimated
  • The customer or project team discovers obstacles or possible efficiencies that require them to deviate from the original plan
  • The customer or project team are inefficient or incapable of completing their required deliverables within budget, and additional money, time, or resources must be added to the project
  • During the course of the project, additional features or options are perceived and requested
  • The contractor looks for work items to add to the original scope of work at a later time in order to achieve the lowest possible base bid price, but then add work items and fee back on once the contractor has been hired for the work. This is an exploitative practice.

 

 

Analysis and comparison of the alternatives

 

Causes for change requests/orders in oil & gas projects by cause & effect fishbone diagram

 

Selection of the preferred alternatives

 

The preferred causes could be ranked as follows:

First:                Design Change
Second:           Wrong estimation
Third:              Unforeseen Conditions
Fourth:                        Project resources/ Material

 

 

Performance monitoring and the post evaluation of results

 

Considering the above ranking, the main causes of change orders in Sudan oil & gas projects, is a design change translated in a poor ITB, the same delivered to the contractor with a lot of mistakes and missing parts, as a result of missing standard WBS to bind the owner and the contractor in the same track.

 

 

Conclusion

 

One of the main causes of change order is the poor of early planning of the project which lead to poor ITB. Adopting a standard WBS will minimize the number of change orders, and put contractor and owner in the same train. At the construction stage, the coordination and communication amongst various parties working on the project is of great importance to improve management and this controls problems and reduce change order

 

 

References

 

* Project management dictionary-English-Indonesian, PTMC Apr2006.

* Memory jogger 2 tools for continues improvement and effective planning.  Cause and effect/fish bone diagram.

* Wikipedia, the free encyclopedia.  http://en.wikipedia.org/wiki/Change_order

* Common Causes for a Change Order, By Juan Rodriguez

http://construction.about.com/od/Claims-Management/a/Common-Causes-For-A-Change-Order.htm

* Change Orders, Al-Muhammad, Faisal H.Al-Harthi Majed H. faculty.kfupm.edu.sa/cem/assaf/Students_Reports/Change-Orders.pps