International Drilling: Avoid Troubled Waters

By J. Leroy Ward 
Tuesday, 08 July 2008

Many organizations have protocols in place for dealing with the unique challenges associated with international projects. But, for those companies in the business of oil and gas extraction, projects are not only international, they are often based in some of the most difficult, turbulent project environments in the world. This, combined with the sheer size of budgets and scopes associated with the industry, makes for high risks and ominous potential failure rates.

Working in the oil and gas industry means having to deal with many foreign languages and dialects, unfamiliar legal systems, fluctuating exchange rates, differing cultures and work ethics, and, most notably, extreme political and social unrest. One only has to watch the nightly news to understand the real-life dangers of oil and gas extraction in the world today.

Here are some key project management�– tips, broken out into familiar process groups, that organizations can use as a guide to managing their challenging extraction projects. Note the emphasis placed on initiation and planning; one can never be too prepared for a project of this magnitude.

Initiating and Planning
An essential part of the initiation process is to recognize the importance of cultural awareness training for your employees. Clearly, the more your team members know about their project locations and the people there, the better prepared they’ll be to succeed.

In addition to this cultural appreciation, employees must understand the context behind their projects. This involves researching the reason for the selection of each project, studying the countries and industries involved, and assessing feasibility. This sort of legwork will help your organization gauge the extent of the local risks and opportunities that will be faced on the ground for the duration of the project.

On a planning and logistics note, organizations preparing to move their team members to foreign locations need to concern themselves with the logistics of relocation and all the issues regarding personal security. Finding a competent relocation company to help your people uproot their lives is an excellent and, frankly, basic example of best practice. Details such as organizing visas, work permits, vaccinations and setting up households simply require too much red tape for your individual employees to be expected to handle on their own.

Depending on the specific location, armed, professionally trained escorts and security personnel may be required 24 hours a day, seven days a week. A solid, trustworthy set of security plans is not only important to a team’s safety, it may be a requirement for team members who are considering accepting a transfer to an extraction project, particularly those team members with families.

Here’s a helpful checklist of tasks to be completed in the initiation and planning stage:

• Form a global project team with an emphasis on team members who have experience in the region.

• Work with stakeholders to understand the project requirements and scope.
  

• Develop a work breakdown structure for each project.

• Estimate preliminary costs and develop a detailed schedule.

• Solidify relationships with subcontractors in the region where necessary.

• Develop a comprehensive security plan, including an exit strategy that will be executed in the event of a deteriorating political situatio
  

Executing the Work
In terms of project execution, international oil and gas extraction projects will hinge on the same set of skills that all projects hinge on, including negotiation skills, conflict and crisis management, communication skills and leadership skills. However, project managers will also be forced to deal with a complex web of local laws and regulations – or, in some cases, a lack of laws and regulations.

Local licenses, bureaucracies, policies and customs may in no way mirror those associated with home-based projects. This is why it is extremely helpful – some would say essential – to have team members with hands-on, regional experience in each individual location.

Monitoring and Controlling
Similar skills, too, are required for effective monitoring and controlling so that everyone involved, at every level of the project, understands what is happening and what is expected. Controlling projects of this magnitude is always more complex than controlling domestic projects because they inevitably involve geographically dispersed team members, extreme time and currency differences, and varying cultural and national characteristics.

Closing Out and Exit Strategies
Assuming all has finally gone well and your project has gone off successfully, all of the usual project management best practices in project close-out can swing into action. The addition, of course, is the need to close the loop with your employees by getting back in touch with your relocation company and helping your team members with their repatriation.

Although getting them home isn’t nearly as complicated, it still requires some expertise and a lot of logistics support. As a show of appreciation, you may consider including bonuses, raises and promotion potential. And, never underestimate the powers of restaurant gift certificates.

Finally, if all hasn’t gone well – or if all is suddenly not going well – every international project of this type should include a built-in exit strategy. For home-based projects, an exit strategy might be little more than cleaning out some desk drawers and planning a quick route to the airport. But, for typical oil and gas extraction projects, regional stability can turn overnight, and lives may depend upon your organization’s ability to get its people out of their situation and to safety as soon as possible.

Comprehensive Training
There are a number of performance improvement companies around the world with experience in helping organizations in the oil and gas extraction business improve competencies in project management. Some can also work directly with you to help ensure success for both complex and international projects.

My advice: Find one that works for your organization and begin developing a comprehensive training program for your employees. The success of your biggest, most difficult projects will likely depend on it.

J. LeRoy Ward, executive vice president of ESI International, is responsible for ESI’s worldwide product offerings and international partnerships. For more information, visit www.esi-intl.com.

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