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This seminar starts by reviewing the fundamentals of project management as applied to oil & gas projects, including how we organize such projects & the roles and responsibilities of members of the project team. We then discuss the phased approach to pro

Course Outline

After participating in this course, you will be able to:
• Determine how oil and gas projects are organized and staffed for effective cost control
• Examine how projects are executed in phases and understand the reasons for this execution method
• Understand the concept of contingency and be able to calculate and apply contingency to an estimate
• Note what the Project Management Institute has to say about project cost control
• Distinguish amongst the various types of estimates typically prepared on an oil and gas project
• Develop work breakdown structure for your project  to organize your cost estimate
• Assemble your cost estimate in accordance with estimate presentation standards
• Use cost estimating data for evaluating oil and gas projects
• Measure and report  cost variances
• Compare scope changes and cost trends
• Apply mitigative measures to adverse cost trends

The successful execution of oil and gas projects requires a good knowledge of the principles and practice of estimating and cost control, sometimes known collectively as cost management.  In fact, the management of project costs and the related objectives of time and quality are the essential components of successful project management and are recognized as such by the Project Management Institute.  More projects fail because of unanticipated cost over-runs than for any other single reason.

This seminar starts by reviewing the fundamentals of project management as applied to oil and gas projects, including how we organize such projects and the roles and responsibilities of members of the project team.  We then discuss the phased approach to project execution and explain how this phased approach can facilitate cost control activities.  We move on to the preparation of project cost estimates and explain the different types of estimates that may be required for a typical oil and gas project, including special estimates with special applications, such as those used for project economic evaluation.  Finally we explain how actual project costs are compared to estimated costs and how identified cost variances are reported to the owner and to the project team and how the variance data are used to control project costs.

• To provide an understanding of how projects are organized and executed with special emphasis on the management of project costs
• To describe the various estimates prepared on a typical oil and gas project and to explain how cost estimates are prepared and presented
• To show how cost estimates are used on oil and gas projects to evaluate the expected economic performance of the completed project
   and to provide a basis for cost control activities
• To explain the methods and procedures used for identifying cost variances and how the measurement of cost variances facilitates
   project cost control throughout the execution phase of the project

Who Should Attend
This course will be of interest to all personnel assigned to oil and gas project teams and will be especially useful for anyone requiring a comprehensive understanding of the methods and systems utilized for resource planning, cost estimating and project cost control.

Faculty:   David M. McClement, P. Eng.

Program Outline

Day 1

Registration and Coffee

Welcome, Introduction, Workshop Preview, Learning Outcomes and the Assessment Method

Project Organization and Management
• Review of project management fundamentals
• Definitions and terms
• Types of projects
• EPC projects
• Project objectives
   -  Budget
   -  Schedule
   -  Quality
• Organization of EPC projects
• Roles and responsibilities
• Project execution plan

Project Parameters and Objectives
• Scope of work
• Estimating accuracy
• Paradox of project control
• Concept of contingency
• Relationship between cost, quality and time
• Monitoring performance
   -  Cost
   -  Quality
   -  Time

Project Execution Process
Project phases
• Development plan
• Conceptual engineering
• Preliminary cost estimate
• Preliminary engineering phase (FEED)
• Detailed cost estimate and control budget
• Detailed engineering phase
• Procurement phase
• Construction phase
• Commissioning and start-up


Day II
Principles of Cost Management
• Resource planning
• Cost estimating
• Cost budgeting
• Cost control
• Estimating errors
• Project Management Institute (PMI)’s view of cost management
   -  Inputs
   -  Tools and techniques
   -  Outputs
• Definitions of PMI’s terms
• PMI’s definition of cost control

Project Cost Estimating
• Cost categories
• Types of project estimates
   -  Preliminary estimate
   -  Control estimate
   -  Detailed estimate
• Calculation of contingency
• Price escalation
• Estimate presentation

Project Cost Estimating (continued)
• Work breakdown structure (WBS)
• Example of WBS
• Cost estimate worksheet
• Cost estimate summary
• Sources of estimating data


Other Types of Estimates
• Scaling exponents
• Adjusting estimates for the time period
• Project location
• Factored estimates
• Cost estimates and probability
• Probability and contingency
• Estimating costs of engineering
• Concept of deliverables
• Project cashflows

Measuring Economic Performance
• Net present value
• Payback period
• Rate of return
• Cash flow models
• Project evaluation benchmarks

Controlling and Reporting Costs
• Controlling project engineering costs
• Engineering progress and “earned manhours”
• Cost variances
• Scope changes
• Cost trends
• The project control cycle
• Reporting cost variances
• Project co-ordination meetings
• Reporting engineering discipline performance
• Project cost summary
• Cash flow diagram

Questions and Answers and Feedback to Participants on Achievement of Learning Outcomes

Concluding Remarks and Final Adjournment

There will be a one-hour lunch break each day in addition to refreshment breaks during each morning and afternoon session.

Daily Schedule:
   Registration and Coffee (Day I only)
8:30   Session begins                                                                                                                      
12:00 Lunch
4:30   Adjournment


David McClement
David McClement has more than forty years experience in various aspects of the oil and gas business. Mr. McClement started his career in oil refining and his refinery experience includes operations, maintenance and engineering activities related to the processing of petroleum. After fifteen years in the refining business, Mr. McClement joined a major EPC contractor as a Project Engineer on a large oilsands upgrading project. His EPC experience encompassed the next fifteen years as he advanced through various engineering management and executive positions finally leaving to start his own contracting / consulting company. This company was very successful and was finally sold to a major Canadian EPC company. Since the sale of the company, Mr. McClement has provided training and consulting services in the area of project development and execution, to various domestic and overseas clients.
Prerequisites & Certificates

Certificates offered

1.8 CEU / 18 PDH

Cancellation Policy
To withdraw from a course, you must send a request, in writing, with the official receipt to our office. Fifteen or more business days in advance: full refund less $50.00 administration charge. Five to fifteen business days in advance: non-refundable credit of equal value for any future EPIC seminar within one year. Credits are transferable within your organization. In case of an unexpected event occurring after this time, you may send someone else to take your place without any additional cost.
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The course was very well presented and the course instructor was absolutely amazing.
Reviewed by 2013
Our instructor, Stephen Lamming, was outstanding and a true expert in his field. He was able to complement the technical air monitoring information with practical real life examples which was highly beneficial. He is an excellent communicator and was highly interactive with the course attendees. This course was recommended to me because Stephen Lamming does an outstanding job. I was very impressed with this course and have subsequently recommended it to my colleagues.
Reviewed by 2012
Would have liked more interactive problem solving.
Reviewed by 2011

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