Murchison Project Organization and Control
Authors: Lauren Pentti K. , Hall John N. 
Published: December 2007

This paper describes the project management organization and the management control systems used for Conoco's Murchison field development in the North Sea. These systems created for Murchison proved largely successful and have been enhanced for use during the Hutton field development. Management concepts are described in the context of the cost control system.

Introduction

This paper describes how Conoco (U.K.) Ltd. prepared for, organized, and controlled Murchison, a major North Sea oil project. Before the project was started, an extensive survey was carried out to review the experiences of other companies in their development of similar large projects and the problems they had encountered. This survey showed that these companies had suffered partly because they had not been involved sufficiently in the management of their projects. Generally they had left matters to a managing contractor, whose activities were overviewed only by the client, so the project team lacked decision-making capability. Important decisions that needed urgent implementation had to be referred to a client's corporate organization, which resulted in a lack of communication and efficiency.

The PSC Concept

Therefore, we at Conoco decided, as a first requirement, to manage the project ourselves. However, our manpower resources were quite limited, and project ourselves. However, our manpower resources were quite limited, and management of a large North Sea project was going to take several hundred people. We looked at various alternatives and decided that the most people. We looked at various alternatives and decided that the most practicable would be to use what we called a project services contractor practicable would be to use what we called a project services contractor (PSC) concept. This meant that Conoco and the management contractor each would contribute personnel to the project management team: Conoco would provide the key personnel with decision-making authority, and the PSC would provide the key personnel with decision-making authority, and the PSC would provide the rest of the team. The combined Conoco/PSC team would provide provide the rest of the team. The combined Conoco/PSC team would provide all the management needed for the project, which was expected to involve 70 Conoco and 350 PSC personnel at peak. A PSC was selected, an organization was developed, and as many as possible of the personnel required were identified. Conoco personnel would possible of the personnel required were identified. Conoco personnel would be responsible for the financial, technical, and management decisions on the project, supported by a largely PSC team who thus would be relieved of a considerable burden of accountability. The combined team established the principles to be followed and determined the controls to be implemented. principles to be followed and determined the controls to be implemented. Procedures were drawn up for all areas of project activity, which Procedures were drawn up for all areas of project activity, which identified the methods to be used and the personnel who would operate the systems. The PSC would be largely responsible for implementing and operating the jointly formulated procedures.

Integrated Project Organization

Conoco had a team dedicated to the project-i.e., people assigned to the team had minimal reporting relationships outside the project. This meant techniques and methods to be used on the project could evolve independently of those used outside the project. At the head of the project team was a project director. Reporting to him were line managers responsible for specific areas of the project and functional managers responsible for project controls, procurement, contracts, and engineering support. Each manager had supervisors with small staffs who covered specific portions of the manager's scope. The PSC organization approximately mirrored Conoco's, except that the staff of each PSC supervisor was sized to cover the whole workload of the particular PSC supervisor was sized to cover the whole workload of the particular group (Fig. 1). Conoco's role, then, was that of decision maker.

JPT

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