Westney Consulting Group
2200 West Loop South
Suite 500
Houston, TX 77027
Phone: 713-861-0800
Toll Free: 800-648-3475
Email: info@westney.com

PROJECT MANAGEMENT CASE STUDIES

The following case studies provide examples of Westney services to different types of clients.

Case Study #1: Independent Producer Implements CapEx Management Process to Gain Operatorship on Deepwater Project

A large independent oil company had a growing portfolio of major development projects, combined with a strong culture of flexibility and individual independence.  Improvements in project predictability and performance were needed, but success depended on gaining acceptance that a formal methodology would truly enhance project management effectiveness.

We supported the development of the enhanced work processes and involved key players in the assessment of current capabilities in the context of the current portfolio of major projects.  When the company found itself competing with super-majors for the role of operator on a challenging deepwater project, the strength of its PM process and organization allowed it to gain the confidence of the partners and was awarded the operatorship.

Case Study #2: International Independent Improves Portfolio Predictability

An international, publically traded upstream independent was experiencing stock valuation below those of its peers, in part due to the perception that it lacked the organizational capabilities to deliver projects and production when promised. 

Working for the CEO and his executive team, we performed a global benchmarking study to calibrate the organization’s current capabilities with particular focus on gaps associated with the ability to execute the current worldwide project portfolio.  With the subsequent commitment and support of top management, we developed the required project development and execution processes aimed at improving predictability and performance.  The company’s turnaround in project performance was successful and its valuations improved.

Case Study #3: Supermajor Develops Enhanced Country Strategy

An international oil company was developing a multi-year strategy for its path forward in a major oil-producing nation.  In spite of huge investments, all options from exit to major increases in investment were on the table, and significant political, economic and logistical risks had to be considered.  The company was well aware of the changing role of international oil companies and the increased power and influence of the host countries holding most of the world’s hydrocarbon reserves.

We supported the CEO of the client’s in-country operating company by facilitating a strategic business / country planning process involving a diverse team of international executives and outside experts.  As a result of this process, the company developed an innovative strategy that leveraged competitive advantages, reflected lessons learned, and addressed major risks.

Case Study #4: Merged Oil Companies Evaluate Financial Benefit of In-House Engineering and Project Management Capability

The merger of two oil companies created a new organization which would be taking on a much larger and more challenging project portfolio than either company previously had.  Management was, nevertheless, under pressure to achieve synergies by downsizing.  What was needed was the ability to demonstrate the financial value of an in-house engineering and project management function.

We evaluated the company’s upstream project portfolio in terms of project risk, size, complexity etc., and translated this to a risk-driven competency model.  The impact of project delivery system effectiveness on “capital at risk” was evaluated as a means of determining the value of improving the organization. This client implemented Westney’s recommendations including the development of major capabilities that had not existed in the company prior to that time.  It is now considered a very strong player for major international projects.

Case Study #5: Alternative Energy Developer Improves Finance-ability of Multi-Billion Dollar Coal to Liquids Project.

A developer of alternative energy projects was engaged in the front-end engineering and planning of a multi-billion dollar coal liquefaction project.  The ability to achieve financial close was the critical factor for the project to proceed, and this, in turn, required a thorough understanding of risks and the development of strategies for cost-effective risk allocation.

We supported the developer, engineering contractors, independent engineer, and lender in facilitating a comprehensive assessment of the major risks to completion, as well as the development of an execution strategy that was responsive to these risks and conducive to achieving financial close.  As a result of this program, the developer made significant adjustments to the front end strategy and was able to develop an improved approach to risk management.

Case Study #6: LNG Developer Requires Development Engineering to Support Project Scoping and Execution

A small, North American LNG developer overcame strong competition from a well-established oil company to monetize gas reserves via a fixed floating LNG manufacturing facility.  Lacking the in-house engineering and project management capabilities of the oil company, the developer turned to Westney for assistance in planning and contracting for the front-end engineering and execution of the project.

Using our Front-End LEAN™ and Development Engineering services, we represented the developer in scoping the engineering work, pre-qualifying and selecting contractors, negotiating contract terms and conditions, and reconciling the economic drivers for low cost with the drivers for a sound technical solution. With the strategy in place, we provided ongoing development engineering services to ensure the project’s objectives were met.

Case Study #7: Floating LNG Developer Utilizes Independent Expert Reviews to Support Executive Decisions and Set Strategies

An international shipping company was undertaking a pioneering project to build one of the first floating LNG (FLNG) vessels.  The company needed an outside perspective on the risks they were taking, the completeness and definition of their engineering work to date, and the validity of their execution plan.

We utilized various metrics to calibrate predictability and assess risk exposure for this first of a kind project.  This information was used to make important adjustments to the project budget and strategy, avoiding what could otherwise have been a significant cost overrun and schedule delay.

Case Study #8: New Technology Startup Requires Development Engineering for a Rapid Scale-up Program

A startup company was using a new process technology to convert biomass to synthetic crude oil.  Financed by venture capital, the company also intended to use federal loan guarantees to enable a rapid scale-up from pilot plant to commercial-scale facilities.  This required a carefully-constructed contracting plan, and the ability to leverage the company’s process engineering expertise to effectively manage contractors.

We provided an independent risk assessment of the project and contractor due diligence, as well as ongoing development engineering support for the program of commercial-scale processing facilities.

Case Study #9: Holding Company Utilizes Independent Assessment of Project Risk to Determine Financial Strategy and Basis for 10K Report

A major, diversified holding company with significant investments in a portfolio of capital construction projects needed an independent assessment of the potential cost and completion dates for key projects in order to plan financing strategies and have the information needed for disclosure in an upcoming 10K report.

We supported the board of directors of the holding company and executive management of the operating company in assessing the risks, providing a probabilistic analysis of costs and completion dates, and developing strategic options to reduce risk.  As a result of these efforts, the board had timely information to meet disclosure requirements and implement effective mitigation strategies.

Case Study #10: Private Equity Firm Backing Project Company Requires Independent Perspective on Risk

A private equity (PE) firm had made a significant investment in the development of a project company whose business plan required the construction of an innovative chemical manufacturing facility at an overseas location.  With the estimated costs of the facility continuing to rise, the PE firm required an independent view of the project’s risk exposure, as well as support for project execution planning and the negotiation of the lump-sum turnkey engineering, procurement and construction contract required for project finance. 

We provided an independent assessment of risks and supported the developer in moving the project forward to financial close, with services including contract strategy, investor presentations, and execution planning. 

Case Study #11: Chemical Manufacturer Averts Multi-Biillion Dollar Losses on Middle East Project

A major chemical manufacturer was engaged in a joint venture to develop a multi-billion dollar production facility in the Middle East – a location where their construction experience was limited. 

We assisted the joint venture in developing an improved understanding of the strategic risks facing the project, the associated financial risk exposure, and the alternative execution strategies available to address those risks and ensure an acceptable financial result.  As a result of these efforts, the board of directors implemented a significant change in strategy, thereby avoiding what would otherwise have been significant delays and cost overruns. 

Case Study #12: Chemical Manufacturing Joint Venture Requires Independent Risk Assessment To Align Strategies for External Risks

A leading international chemical manufacturing company was undertaking a mega-project in an overseas location with a host government-owned JV partner.  While both parties had mature project management organizations, they agreed on the value of an outside perspective to assess external risks.

We provided an independent assessment of emerging threats to the project with particular focus on the contracting strategy and time-risk exposure.  This provided the basis for facilitating a strategy stress-testing workshop using scenarios to combine the various threats and serve as the basis for developing alternative strategies.  As a result the JV was well-aligned on the current and fall-back strategies as well as on the external threats to be monitored.

Case Study #13: International Metals Company Requires Independent Risk Assessments to Support Investment Decision

A large international mining and metals manufacturing company was undertaking a portfolio of major projects including smelter upgrades and new mines.  The company had put in place a more rigorous project funding process that required an assessment of project risks that met a similar set of criteria that a bank would employ if the project were to be financed.  Assessing "bankability" required an outside perspective on the cost and time risk exposure.

We used our Risk Resolution® techniques to assess each project and report to the board of directors.  This provided the basis for risk-informed investment decision-making that met the new risk management criteria.

Case Study #14: Government-owned Hydropower Requires Independent Project Review to Validate Project Plans and Capabilities

A government-owned energy entity was engaged in the development of a multi-billion dollar hydropower facility at a remote location.  Given the project’s high level of visibility and accountability to both the rate-payers and citizens, reviews by outside experts were a requirement at each funding gate.

We provided an outside expert perspective on project risk management, execution planning, and work processes to advise management on the project’s readiness for the next funding gate.  As a result, funds were approved and numerous recommendations from the independent review process were implemented in the next phase.

Case Study #15: International Independent Power Producer Requires Quarterly Project Audits to Ensure Predictable Outcomes

A leading independent power producer (IPP) was developing a global portfolio of generation projects.  The company set up a strong internal operations audit function to ensure that each project was being executed so that the cost and time to startup would be consistent with its commercial obligations.

We provided the project risk management expertise and a third party perspective needed to satisfy the operational audit requirements.  Each project was subjected to quarterly reviews which surfaced issues that could impact the outcomes, and facilitated timely corrective actions.

Case Study #16: IOC/NOC Joint Venture Develops Program Strategy for LNG Development

An international oil company (IOC) was engaged in a major program of developments in a joint venture (JV) with a national oil company (NOC) representing a large percentage of the world’s hydrocarbon assets.  This massive development had to be managed as a program of projects, and required a sophisticated strategy and management plan, reflecting, among other things, the many and complex interfaces to be managed.

We supported the management team of the overall program as well as an individual project management team in the development of program-level strategies and project-level execution plans.  As a result of this effort, the client improved alignment of the major stakeholders and enhanced planning effectiveness.

Case Study #17: Deepwater Joint Venture Partners Use Independent Risk Assessment to Align on Strategy

A deepwater operator was undertaking a complex reservoir development which would require costly and innovative applications of enhanced oil recovery.  The project was in the second phase of “front end loading” in which several different development alternatives were being considered.  These differed significantly in terms of the cost, time and risks involved, and the JV partners were not aligned on the best development plan.

We supported the operator and JV partners with a comprehensive assessment of the cost and time risk exposure of each of the alternative development plans.  When combined with the associated production risks, this facilitated a shared understanding amongst all the JV partners on the benefits, costs and risk exposure associated with each case.  The result was alignment around a preferred configuration and improved communication going forward.

Case Study #18: Deepwater Drilling Contractor Bases Strategic Decisions on Independent Risk Assessments

An international deepwater drilling operator was constructing a program of state-of-the-art deepwater drilling rigs and required an independent assessment of the cost-risk as well as the risk of not meeting the sail-away date. The assessments had to consider the impacts of potential client changes, the uncertainties associated with retrofitting existing hulls vs. new-builds, and the shipyards’ ability to deliver.

We used Risk Resolution® and Predictability Calibration™ metrics to assess the various projects over time, and present the results to the Board of Directors to facilitate risk-informed investment decisions.

Case Study #19: Engineered Facility Provider Gains Significant and Sustainable Improvements in Profitability

This company provides upstream developments with custom-built facilities using its proprietary process technology and was accustomed to smaller projects which could be managed successfully on an ad-hoc basis.  They needed to improve profitability and predictability as well as develop an improved capability for larger more complex projects.  An improvement initiative was therefore initiated under the direct leadership of the CEO.

We supported this effort by benchmarking the organization and performing a gap analysis relative to the competencies required for future projects, then worked with a leadership team to implement recommendations. As a result of these efforts, although management expected that 18 to 24 months would be needed for meaningful improvements to materialize, in fact margins improved significantly in only 9 months, and the company was able to take on much larger projects one year earlier than expected.

Case Study #20: State of Alaska Implements Innovative Strategy for $30 billion Gas Pipeline Project

The construction of a gas pipeline from the North Slope to markets in Canada and the lower 48 has long been a priority for Alaska and a major factor in state politics.  The passage of the Alaska Gasline Inducement Act (AGIA) in 2007 presented the industry with a new approach to funding and licensing such a project.  It also presented the State’s Department of Natural Resources with unprecedented challenges in organizing and implementing a process for obtaining and evaluating applications to build the pipeline.

We assisted the State in designing the Request for Applications and implementing an application evaluation process incorporating assessments of likelihood of success.  As a result of these efforts, the Governor of Alaska and the Commissioner of the Department of Natural Resources publically recognized Westney Consulting Group for our contributions to the success of the Alaska Gasline application process.

Case Study #21: Leading NOC Seeks Latest Best Practices in Managing Large Project Portfolio

When a large national oil company (NOC) became publicly traded, its executives identified a need to ensure that its large upstream CAPEX investment portfolio was being managed in accordance with the latest thinking and best practices.  Of particular interest was the cost-efficiencies associated with projects in the Gulf of Mexico.

Partnered with a leading engineering firm, we developed and presented a series of management seminars covering current best practices and trends in CAPEX portfolio management, project management, and field development.  In addition, we and our engineering partner provided full-time consulting to project teams to facilitate the introduction of improved work processes.  As a result, the client improved portfolio planning and project performance.