West Seno Project & Construction Management Challenges
Authors: Stiehl George L. , Hampshire Larry 
Published: October 2008

This paper reviews the major project and construction management challenges experienced on West Seno, along with the techniques employed for overcoming these challenges. This information can be applied to other construction projects executed in Asia.

The West Seno project innovated in contracting and construction in three important ways:First EPIC for deepwater facilities directly with an Asian shipyard and inclusive of pipelines and installation;A multiple contract strategy within the same bidding within the Indonesian system;First Asian fabrication of TLP tendons.

Facilities Project Development & Execution Strategy

West Seno was always developed as an EPIC project from the Operator's perspective, but as things turned out, there may be little justification for that particular contract strategy. Since the features incorporated in the project were beyond the ability of any single contractor to perform, it was clear that major constructors could not take on the entire project and would require support from several different sub-contractors. The engineering requirements alone were beyond one entity, and have required the work of a number of different specialist groups. In todayâ??s world of mitigating risk, the project was never likely to be executed by one company, but would be a partnership of several major contractors bringing together different skills to execute the overall project. Collaborations on such a large-scale activity are prone to problems at the point of contact of the partners, and are therefore a challenge to the Operator to manage successfully. The West Seno project, however, did not initially materialize in its final contract configuration, but evolved through a long and arduous process.

Indonesian Plan of Development

The government of Indonesia operates production sharing agreements with operating companies for the purpose of producing oil and gas and other resources. Once a resource discovery is made, the Indonesian Government must be satisfied that there is an appropriate economic development scenario for the resource that will be profitable. The primary tool for this purpose is a Plan of Development, prepared by the developing company and submitted to the government for approval. This plan incorporates all the of the facilities, drilling, construction, and development of a particular field, and provides an economic analysis showing proposed income to the Operator, as well as the government, based on a conservative level of pricing for the resource. If the development plan is sufficiently robust such that a substantial income can be achieved at a reasonable cost with conservative assumptions of the value the resource, then the development plan will be approved and a full scale project to construct the production facilities may be commenced.

The difficulty with the Plan of Development is that the company is compelled to commit to a comprehensive analysis of the costs of facilities long before FEED (Front-End Engineering & Design) is complete and well before any construction contractors develop proposals for the work.