2010 PM Economic Crisis

8/2/2019 2010 PM Economic Crisis

1/13

BEST PRACTICES IN PROJECT MANAGEMENT

ADVANCED SERIES

Managing projects in an

economic crisisWhat should project managers think ofwhen implementing projects in an uncertain economicenvironment

Prepared by:

Harjono Zainal Abidin

MENTOR Project Management Sdn Bhd

Project Managers to Energy Industry

Kuala Lumpur, Malaysia

URL www.mentor-solutions.com.my

E mail [email protected]

Harjono Zainal AbidinQUORUM Oil & Gas Sdn Bhd


2/13

THE FIRST STEP

Planning process Business environment

- Range of external factorsthat may influence theproject

Regional & Global scale

- -

factors

Areas of Uncertainty Economic Crisis

Peak Oil

19-Oct-2010 2MENTOR Project Management Sdn Bhd


3/13

STANDARD PRACTICE Framework

PROCESSES

KNOWLEDGE AREAS

19-Oct-2010 3

Refer Project Management Insitutewww.pmi.org



4/13

Planning Process Activities

IDENTIFYANALYSE/FORMULATE

19-Oct-2010 4

MONITOR/RE-ASSESS



5/13

PROJECT: NEW OIL Co. BUSINESS

Energy projects timeline 30 years

experience level?

Work Program & Budget estimate of the production barrels

potential value.$$$

Planning for projects beyond 2010.

19-Oct-2010 QUORUM Oil & Gas Sdn Bhd 5


6/13

NEW OIL Co. BUSINESS PLAN

Project 1Oil Field

EXECUTIONProcurementConstructionInstallation

tion

arrelsperday

ces

er&Equipment

day

Project Life CycleLong View

Short View

CLOSE-OUTHand-over to Production


20152012 2013 20142010 20112005 2030 2040 205020202010

Project 2Gas Field

Project 3Oil Field

INITIATIONEntrepreneurshipPolitics & EconomicsFunding

PLANNINGLegal & RegulatoryFeasibility StudiesExplorationDevelopmentEngineering

CONTROLMonitoring

1st OilStart Revenue

Prod

u

Millio

n

Reso

ur

Manpow

Costper


7/13

PROJECT REVENUE

Production

Million

barrelsperday

Total Reserves

Revenue depends on estimate ofTotal Recoverable Reserves800 Million bbls

And the value of a barrel of oil!1 Barrel = USD X ?

Select Conservative median or most likely plan

19-Oct-2010 7

2030 2040 205020202010

Revenue

MillionUSD

0

Total Revenue

Total Expense CostCAPEX

Based on USD70 per barrel of oilBenchmark Gold USD 30 per gram in2009.

NOTE:As of 15-Oct-2010Oil USD83 per barrelGold USD 41 per gram

variations to be continuously monitored

(+)

(-)



8/13

ost$Millions

WORK PROGRAM & BUDGET

YEAR

Holding CoEXPENSEAdministrationHuman CapitalRegulatoryExploration &DevelopmentMaintenance

REVENUEProduction

2010

$$$

2040

$$$

2020

$$$

2030

$$$

2050

$$$

Best

Median

19-Oct-2010 MENTOR Project Management Sdn Bhd 8

Oilfield BOilfield C

TREASURYSovereign WealthFund

SubsidiariesRefinery

Tank FarmPetrochemicalsPortUtilitiesPowerWaterCommunicationsOther Essential Svs

PLANNING CASE STUDIESEnables Management to make

well-informed decisions with restraintNot overly ambitious

Worst


9/13

SCENARIO: HEAD FAKE

200

250

300

2015USD300 bbl

Hoperevealed as

Illusion

Depletion ofsupergiant

oilfields

2013USD150 bbl

S2010

S2008

Source:

Oil Head-Fake Update 2010Global Recession Triggers Price CollapseCharles Hugh Smith www.oftwominds.com

We are here!

2009USD85 bbl

Global recessiondrives price down

19-Oct-2010 9

20152012 2013 20142010 201120092008

50

100

150

2014USD125 bblHope of new prod& tech miracles

drops

belowdemand

2011 - 2012USD25 bblGlobal recessiondestroys demand

Massive stimulus

drives demand up

Oil exporters pumpmax to maintainrevenue, pricecollapses

USD150 bblGlobalspeculationdrives price up

2007USD50 bbl

2007

OilP

rice

US

D

perbarrel



10/13

PEAK OIL?



11/13

GLOBAL OIL & GAS PRODUCTION

Natural Gas LiquidsPolarDeepwaterHeavy Oil

Regular Oil

OilP

ro

duction

MillionBa

rrelsPerDay

We are here!80 Mbpd

Source: Association for the Study of Peak Oil & GasPostPeakLiving.com

80OilPrice

USD

perbbl

19-Oct-2010 11

20101930 20502030

60

40

20

0

1980 1990 20001970 2020 2040196019501940

60 Mbpd



12/13

Origins of Financial/Economic Crisis


Wars

Oil Price


13/13

ECONOMIC CRISIS?


2010 PM Economic Crisis

Documents

Transcript of 2010 PM Economic Crisis