Empfohlen
Empfohlen
Weitere Àhnliche Inhalte
Ăhnlich wie EY_STAGE_GATE_PROCESS_CAPITAL PROJECTS CONTROLS .pptx
Ăhnlich wie EY_STAGE_GATE_PROCESS_CAPITAL PROJECTS CONTROLS .pptx (20)
KĂŒrzlich hochgeladen
KĂŒrzlich hochgeladen (20)
EY_STAGE_GATE_PROCESS_CAPITAL PROJECTS CONTROLS .pptx
- 1. Identify opportunities in line with Company strategy. Select the best alternative to implement the project. Finalize project scope, cost and plan and obtain approval of funds. Execute the project, considering the scope, cost and plan. Operate and assess ensuring performance and maximum return for the company. Identification Selection Definition Execution Operation and Control Is the opportunity aligned with Company strategy? Is it the best alternative to implement the project? Should the Project proceed? Can operations start? G4 G1 G2 G3 Describe Best Project Implement Best Project Benefits of Stage-Gate Governance ï¶ Alignment of resource commitment (e.g. financial, organizational) to project definition, leading to investment optimization and cost savings ï¶ Optimised effort in project development, by addressing critical success factors defined for each stage-gate; ï¶ investment in early-stage planning (or Front End Loading) ï¶ Effective mitigation of risks through effective stakeholder engagement, by ensuring dependencies/ unknowns are analyzed progressively, stakeholder inputs are duly considered and carry-over of risk is minimized to subsequent stages Pre-Feasibility Concept Feasibility
- 2. KEY IMPERATIVES BEFORE RRPL FEL 1 Concept FEL 2 Pre-Feasibility FEL 3 Feasibility FEL 4 Execute FEL 5 Operate G4 G1 G2 G3 â Eliminate Options & Select Best project Define Best Project Execute Best Project Have options (e.g. capacity/ location/ technology) been identified for the opportunity under consideration? Has technology assessment been completed for listed options? Has site evaluation been initiated? Have conceptual layouts and conceptual engineering definition been completed? Have major risks associated with the opportunity, along with critical success factors for the project been identified? Has the Class 5 Cost Estimate (- 50% to +100%) been prepared? Have major milestones for the opportunity/ project been identified? Has Conceptual Procurement Plan been prepared? Has Long Lead strategy worked out? âș Have we evaluated and finalized the technology option for further definition? âș Have we evaluated and finalized the site for the project? âș Have the Lessons Learnt from similar projects been reviewed and incorporated? âș Has the preliminary Project Execution Plan been prepared? âș Has the preparation of Environmental Impact Assessment been initiated? âș Have project sustainability objectives been frozen? âș Has initial Geo-Technical study been initiated? Have preliminary plot plans been prepared? âș Has the process of detailed risk identification been initiated? âș Has the evaluation of Execution and Contracting Strategy been initiated? âș Has the Class 4 Cost Estimate (- 30% to +50%) been prepared? âș Has the preliminary L-1 schedule been prepared, duly sequenced âș Has the Execution & Contracting Strategy been prepared? âș Has the Environmental Impact Assessment been approved? âș Has the Geo-Technical Study been completed? Have plot plans/ plant layout been prepared? âș Has the mandatory engineering definition been achieved? âș Has the Class 3 Cost Estimate (- 20% to +30%) been prepared? âș Has the Level-1 Integrated Project Schedule been prepared, duly sequenced and networked? âș Have project risks been identified & qualified, mitigation plans prepared and contingencies estimated? âș Has Constructability Assessment been initiated? âș Has Baseline Procurement Plan prepared? âș Has Order Placed for Long Lead Items? âș Has All engineering deliverables prepared timely & to the correct standard? âș Has all equipment & material purchased and being delivered within time & budget? âș Has all the statutory clearances for build has been obtained? âș Has the execution organization in place? âș Are all execution manpower & other resources are deployed? âș Have all services contract been laid out? âș Are all HSEQ need of the project addressed? âș Is the operation organization in place? âș Is the operation philosophy defined? âș Is the Raw Material & Consumable sourcing strategy defined & infrastructure is in place? âș Is the product evacuation strategy defined & infrastructure in place? âș Are maintenance strategies defined and in place? âș Are all CSR being implemented as per the vision adopted?
- 3. OUR FRAMEWORK FOR FEASIBILITY ASSESSMENT AND BUSINESS CASE FEL 1 Identify FEL 2 Assess & Select FEL 3 Define FEL 4 Execute FEL 5 Operate G4 G1 G2 G3 Define Best Project Execute Defined Project Realize Value Identify Options Select Best Option Is the opportunity aligned with Company strategy? Is it the best alternative to implement the project? Should the Project proceed? Can operations start? âMake the right promiseâ âDeliver on the promise madeâ FID âș Define Objective âș Market Study âș High Level Technical Study âș Financial Analysis âș Business Case Definition âș High Level Project Definition âș High Level Demand Supply Analysis âș High Level Technical Study âș High Level Financial Analysis âș High Level Business Case âș Business Objectives âș Detailed Market Study âș Technical Study âș Statutory Approvals âș Financial Analysis âș High Level Business Case âș High Level Project Objectives âș Customer, Supplier, Competition, Market Environment, Substitutes âș High Level Technical Study âș Statutory Approvals Requirement Details âș Financial Analysis âș High Level Business Case Activities Deliverables âș Review Business Case âș Technology Eval. âș Facilities Design Basis âș CAPEX estimation âș Financial Design Basis âș PEP âș Updated Business Case âș Technology Recommendation âș Design Basis âș CAPEX âș Financial Requirement âș Project Executive Summary âș Project Execution Plan âș Detailed Business Case
- 4. PROJECT DEVELOPMENT, REVIEW AND APPROVAL KEY QUESTIONS âș Have options (e.g. capacity/ location/ technology) been identified for the opportunity under consideration? âș Has technology assessment been completed for listed options? âș Has site evaluation been initiated? âș Have conceptual layouts and conceptual engineering definition been completed? âș Have major risks associated with the opportunity, along with critical success factors for the project been identified? âș Has the Class 5 Cost Estimate (-50% to +100%) been prepared? âș Have major milestones for the opportunity/ project been identified? âș Has Conceptual Procurement Plan been prepared? âș Has Long Lead strategy worked out? âș Have we evaluated and finalized the technology option for further definition? âș Have we evaluated and finalized the site for the project? âș Have the Lessons Learnt from similar projects been reviewed and incorporated? âș Has the preliminary Project Execution Plan been prepared? âș Has the preparation of Environmental Impact Assessment been initiated? âș Have project sustainability objectives been frozen? âș Has initial Geo-Technical study been initiated? Have preliminary plot plans been prepared? âș Has the process of detailed risk identification been initiated? âș Has the evaluation of Execution and Contracting Strategy been initiated? âș Has the Class 4 Cost Estimate (-30% to +50%) been prepared? âș Has the preliminary L-1 schedule been prepared, duly sequenced and networked? âș Has Draft Procurement Plan prepared? âș Has Enquires floated for Long Lead Items? âș Has the Execution & Contracting Strategy been prepared? âș Has the Environmental Impact Assessment been approved? âș Has the Geo-Technical Study been completed? Have plot plans/ plant layout been prepared? âș Has the mandatory engineering definition been achieved? âș Has the Class 3 Cost Estimate (-20% to +30%) been prepared? âș Has the Level-1 Integrated Project Schedule been prepared, duly sequenced and networked? âș Have project risks been identified & qualified, mitigation plans prepared and contingencies estimated? âș Has Constructability Assessment been initiated? âș Has Baseline Procurement Plan prepared? âș Has Order Placed for Long Lead Items? FEL 1 IDENTIFY FEL 2 ASSESS & SELECT FEL 3 DEFINE G1 G2 G3 DEFINE BEST PROJECT IDENTIFY OPTIONS SELECT BEST OPTION IS THE OPPORTUNITY ALIGNED WITH COMPANY STRATEGY? IS IT THE BEST ALTERNATIVE TO IMPLEMENT THE PROJECT? SHOULD THE PROJECT PROCEED? âMAKE THE RIGHT PROMISEâ FID
- 5. STAGE GATE FRAMEWORK (2/3) âșStage Gate Framework is flexible in terms of number of Gates to be followed depending on nature of Project Critical Projects Significant Projects Routine Projects âș CAPEX: > 25 M USD âș High Complexity âș High Risk âș CAPEX: > 5 M USD and <= 25 M USD âș Medium Complexity âș CAPEX: <= 5 M USD âș Low Complexity FEL 1 Concept FEL 2 Pre-Feasibility FEL 3 Feasibility FEL 4 Execute FEL 5 Operate G 4 G 1 G 2 G 3 FEL 1 Concept FEL 2 Pre-Feasibility FEL 3 Feasibility FEL 4 Execute FEL 5 Operate G 4 G 2 G 3 FEL 1 Concept FEL 2 Pre-Feasibility FEL 3 Feasibility FEL 4 Execute FEL 5 Operate G 4 G 3 Project Classes Number of Gates Criteria âș Critical Project: Setting up New Refinery /Petrochemical Complex âș Significant Project: Adding New Unit in Existing Complex (New Diesel Hydrotreater for Euro IV quality Diesel) âș Routine Project: Revamping Existing Unit for improvement of Quality / Quantity of Product Examples
- 6. STAGE GATE FRAMEWORK (3/3) âșStage wise functions and involvement Stages Functions FEL 1 FEL 2 FEL 3 FEL 4 FEL 5 Business Technology Project Management Project Control Engineering Procurement & Contracts Vendors & Contractors Construction Operations and Management Support Services Management No Involvement Low Involvement Medium Involvement High Involvement Responsible
- 7. Stages FEL 1 FEL 2 FEL 3 FEL 4 Engi neeri ng Level of Engineering Definition <5% <20% <40% 50% to 100% Process Design Preliminary Issued for Information Issued for Design Issued for Construction Layout Definition Block Diagrams Major Equipment laid out (long leads/critical) Major Equipment & Structures laid out Multi disciplinary model complete Material Take Offs - Benchmark estimates Information Actual Proc ur- eme nt Procurement Plan Conceptual Draft Plan Baseline Plan Updated Plan Long Leads Strategy Identified Enquiries Issued Order Placement Delivered Con st, Com m & Oper ation s Modularization/ Pre Assembly - Conceptual Preliminary Final Constructability - Planned Reviewed Implemented Logistics and Installation - Planned Reviewed Implemented Sche - dule Project Master Schedule Level 1 Level 1 Level 1-5 Progress Reporting - - Preliminary Final Proje ct Budg et Purpose of Estimate Concept Study and cost of prefeasibility study Viability Base line Detailed base line Methodology Parametric or capacity factored Budget vendor quotations MTOâs from defined work pkgs; firm vendor quotation Detailed MTOâs and final vendor bids Contingency +30% to 40% +20 to +30% +10% to +20% +05% to +10% Accuracy Range L: -20% to -50% H: +30% to +100% L: -15% to -30% H: +20% to +50% L: -10% to -20% H: +10% to +30% L: -05% to -15% H: +05% to +10% STAGE WISE LEVEL I DELIVERABLES
- 8. ACCURACY OF COST ESTIMATION AND CONTINGENCY Stage FEL 1 FEL 2 FEL 3 FEL 4 Estimate Class CLASS 5 CLASS 4 CLASS 3 CLASS 2 Estimation Purpose Screening Concept Study Budget, Authorization, or Control Control Cost Estimation Methodology Capacity Factored, Parametric Models, Judgment Equipment Factored or Parametric Models Semi-Detailed Unit Costs Detailed Unit Cost Accuracy of Cost Estimation L: -20% to -50% H: +30% to +100% L: -15% to -30% H: +20% to +50% L: -10% to -20% H: +10% to +30% L: -05% to -15% H: +05% to +10% Percentage Contingency +30% to 40% +20 to +30% +10% to +20% +05% to +10%
- 9. STAGE WISE LEVEL II DELIVERABLES FOR ENGINEERING Stage FEL 1 FEL 2 FEL 3 FEL 4 FEL 5 Estimate Class CLASS 5 CLASS 4 CLASS 3 CLASS 2 CLASS 1 Project Scope Description General Preliminary Defined Defined Defined Plant Production/Facility Capacity Assumed Preliminary Defined Defined Plant Location General Approximate Specific Specific Specific Specific Soils & Hydrology None Preliminary Defined Defined Defined Defined Integrated Project Plan None Preliminary Defined Defined Defined Project Master Schedule None Preliminary Defined Defined Defined Escalation Strategy None Preliminary Defined Defined Defined Defined Work Breakdown Structure None Preliminary Defined Defined Defined Project Code of Accounts None Preliminary Defined Defined Defined Contracting Strategy Assumed Preliminary Defined Defined Defined Block Flow Diagrams Started/Preliminary Preliminary Completed Completed Completed Plot Plans Started Started/Preliminary Completed Completed Process Flow Diagrams Started/Preliminary Preliminary/Completed Completed Completed Utility Flow Diagrams Started/Preliminary Preliminary/Completed Completed Completed Piping & Instrument Diagrams Started Preliminary/Completed Completed Completed Heat & Material Balances Started Preliminary/Completed Completed Completed Process Equipment List Started/Preliminary Preliminary/Completed Completed Completed Utility Equipment List Started/Preliminary Preliminary/Completed Completed Completed Electrical One-Line Drawings Started/Preliminary Preliminary/Completed Completed Completed Specifications & Datasheets Started Preliminary/Completed Completed Completed General Equipment Arrangement Drawings Started Preliminary/Completed Completed Completed Mechanical Discipline Drawings Started Preliminary/Completed Completed Electrical Discipline Drawings Started Preliminary/Completed Completed Instrumentation/Control System Drawings Started Preliminary/Completed Completed Civil/Structural/Site Drawings Started Preliminary/Completed Completed General Project Data Engineering Deliverables
- 10. 10 STAGE GATE PROCESS (TBD) The project stage gate process framework will establish the decision criteria and processes for progressing the project from one stage to the next Initiation Execution Planning Close-out S G DP DM Review and close project set- up and undertake commissioning activities Safely implement project consistent with scope, specifications, cost and schedule Long term and short term plans for engineering, procurement, construction and commissioning Finalize project scope, design, cost, & schedule Operation Operate and evaluate performance relative to business strategy S G DP DM S G DP DM S G DP DM DP: Decision Package DM: Decision Maker SG: Stage Gate DM DP S G
- 11. âȘ Failure to set standards âȘ Failure to optimize design (value engineer) for project âȘ Failure to optimize design across multiple projects âȘ Over-engineering or inadequate engagement of operations including consideration of full lifecycle costs âȘ Procurement functions are overwhelmed - creates a bottleneck and loses control âȘ Poor strategic alignment âȘ Lack of project detail âȘ Unrealistic assumptions (market, technical, regulatory etc) âȘ Capital scarcity competing projects - investors require a far quicker +ve NPV than before the banking crash âȘ Far greater scrutiny on ROI and difficulties managing stakeholder expectations âȘ Unpredictable market conditions âȘ High level of Project optimism/misplaced commitment âȘ Lack of contract strategy and alignment to work scope âȘ Selecting the wrong contractor (Price rather than value or maturity) âȘ Poor understanding of the supply chain and current market conditions âȘ Fraud risk/ counterfeit product risk âȘ Ineffective management reporting âȘ Health, safety, environment (TRIR) âȘ Inexperienced project management functions âȘ Fail on market analysis and valuation âą Lack of clarity surrounding the appropriate contracting model âą Resource planning / availability challenges âą Estimating realistic capital costs âą No common project/ programme management processes âą Poor understanding of where risk is best managed (client vs supply chain) âą No culture of "programme delivery" vs asset operator EYâs expertise in Capital Investment Projects Appraise Select Define Execute Operate EYâs Commonly Occurring Lifecycle stage challenges Lifecycle stage specific credentials Cross- Lifecycle credentials Credential s Key N.B. The number within in each circle provides a link to the detailed credential which can be found in the appendix X Oil & Gas Cred X Power & Utilities Cred X Mining & Metals Cred 1 Improving Contractor Mgt 2 Gaining control of Capital Investment 3 Investment Appraisal Process 4 Program and vendor management 5 Capital Commercial Excellence 6 Smart metering delivery design 7 Revised Contracting Process 8 EPCM Incentive Review 9 Business Case Analysis for gas interconnection 10 Smart metering â Regulatory Positioning 11 Capital Projects Contracts Risk Assessments 12 Compliance & construction mgt X Infrastructure Cred 16 Internal Audit 17 Cost Verification 18 Station Redevelopment Process 19 Project Mgt Capability Enhancement 20 Transforming operations 21 Programme Assurance 22 Organisational Design 23 Security & Resilience 24 Expansion Diagnostic Review 26 Assurance & Program Management Capability 27 Independent Investment Review 28 Internal Audit 30 Tendering Methodology & Sourcing Strategies What are Shellâs Challenge s? Project life cycle Initiation Business Case Test Opportuni ty Data appraisal Concept selection Developme nt Plan Negotiatio n Strategy Design basis Execution Plan Design & Commissi on Operate Maintain & Improve FEED 13 Project Assurance System Review 14 Resource Planning Process 25 Contractor Review 29 Governance Structure Design X UK&I Cred Global Cred 15 Contract Mgt System Enhancement X Construction Advisory Audit 31 Proj Mgt Plan Development 32 Construction Cost Evaluation 33 Construction Cost & Schedule Review 34 Procurement Process Improvement 35 Finance Community of Practice 36 Project Mgt Process Review 37 Oil Sands Org. Design 38 Contract Mgt Review 39 Integrated Planning & Project Practices 40 Upstream Risk Management 41 Upstream Project Coordination 42 Critical Resources Mgt 43 JV Process Management 44 Budget / Contractor Revision 45 Project Spend Analysis 46 Financial Expenditure Analysis 47 Supply Chain Process Management 48 50 Supply Chain and Skills Requirements for Onshore O&G FID âȘ Ineffective handover operational handover âȘ Poor asset register âȘ Poor asset management strategy and processes âȘ Asset integrity is not fully understood âȘ Poor investment case âȘ Poorly Optimised spares management âȘ Minimisation of overheads as plants move towards decommissioning âȘ Infrastructure and equipment sabotage Project Expansion Audit 49