Can Advanced Work Packaging survive the demise of Oil & Gas?
By Josh Girvin, O3 Solutions CEO
There has been a lot of recent talk about the impending demise of the oil and gas industry. The term “impending” must be used loosely because nothing like this happens overnight, and it will likely be years before meaningful changes are made. Energy companies are, however, starting to look to a future where our dependence on oil and gas is reduced. Many of those companies are working to maximize revenue from existing facilities without significant new investment, while at the same time casting an eye over the potential for diversification into renewable energy.
So, what does this do to Advanced Work Packaging (AWP), as a project delivery method?
AWP started in oil and gas and has become a regular contractual stipulation on capital projects in that industry. Owners, engineers, and construction contractors are all seeing the value of AWP implementation for overall project performance. It can, when applied effectively, improve key project metrics like cost and schedule performance, which will make the prospect of executing capital projects during this time of uncertainty more palatable.
But if the oil and gas projects dry up, will that lead to the end of AWP?
The simple answer is no. Markets are shifting and global priorities are being realigned, but the underlying need to optimize project delivery remains. Capital projects, regardless of the industry, will always retain an element of execution risk which can impact the chances for successful project outcomes. Simply put, there is always going to be a very real prospect of late delivery, cost overruns, or safety incidents.
AWP, when you boil it down to its core tenets, is a planning process. Any project that has a degree of complication or complexity will benefit from effective planning and from a robust software platform to streamline and standardize that planning process. The concept of pulling that planning effort back into the early stages of the project, when meaningful change can be achieved, is well known and certainly isn’t unique to oil and gas.
Other industries are already seeing the value of AWP as an execution methodology:
All these industries execute scopes of work that require complex, multi-disciplinary, multi-contractor arrangements. In each case, projects will be subject to risks from execution performance, engineering delivery, material availability, funding limitations, manpower and equipment availability, coordination, and interface management, to name just a few.
The key processes associated with AWP, supplemented by collaborative software, will provide excellent support and benefit to managing these project risks:
Early construction planning – Identifying the optimal sequence of installation, which will help to maximize field efficiencies and avoid early mobilization. An important step for any non-linear execution project.
Engineering priorities – Sequencing the engineering work to support the path of construction, which is crucial for any industry or project where construction will start before engineering is 100% complete.
Procurement priorities – Buying major items and bulk materials in the correct order and making sure that they arrive on-site in time for installation. Managing vendor data and manufacturing timing.
Efficient field execution – Planning the work to sufficient detail, identifying all constraints, and ensuring that the scope of work is available for unrestricted installation by the field crews. For most industries, construction remains the area of highest risk and greatest cost, so this will always be the primary focus of the process.
Visibility and oversight – The ability of the project to accurately understand, in real-time, the current status of the work and to see any deviations from the plan early. This allows for rapid and timely correction, to keep the project on course for completion.
When you look at these high-level descriptions, it is hard to imagine an industry that wouldn’t benefit from this approach.
When considering if AWP is right for your industry, look at your project risk register and see the areas of concern that might impact your ability to deliver on time and on budget. If any of this lines up with what we have highlighted today, AWP can help.
The decline of oil and gas may be “greatly exaggerated”, or it may be inevitable. But AWP is a project delivery process that is here to stay and can easily be used to support any industry that will benefit from improved planning and more efficient execution.