CASE STUDYClear and Consistent Communication is the Essence of a well-executed Project

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Improving major capital project success rate in the current market climate

Outside our control Under Our Control

• Capital Discipline

• the projects we sanction

• the partners we choose

• how well we execute

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The importance of contractual communications

• Communications are governed by contractual obligations• Communications provide early warning indicators of risk• Clarity, consistency and timeliness build good contractual

relationships• A complete communication audit trail is fundamental to managing

and defending against claims

[WHEN BUILDING MEGAPROJECTS]

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Standardization of communication processes• Communications are governed by contractual obligations

– Format, terminology– Frequency– Communication channel– Turnaround time of formal responses

• Failure to meet contractual obligations exposes either party to risk of penalties or claims

Our solution: a shared communications platform

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Shared, secure, web enabled communications platform

Owner Operator view of contract communications register and status

Contractor view of contract communications register and status

• All contractually significant communications must be transmitted via the system

• Provides full transparency and traceability

• Always the latest version of communications, with the latest attachments

• No silos of emails scattered around personal mailboxes

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Standard templates enforce a common execution languageGeneral Correspondence

TQ Technical QueryMOM

Minutes of Meeting

TAF Travel Authorisation FormChange Management

DCN Design Change NoticeTDR Technical Deviation RequestCOR Change Order RequestCO Change Order

Manage Payment

AFP Application For PaymentPC Payment CertificateMCC Milestone Completion

CertificateINV Invoice

• Consistent terminology across all contracts

• Consistent templates and formats across all contracts

• Consistent reporting across all contracts

• Reduced administration for both parties

• Increased clarity about outstanding issues and risks between parties

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Communications are early warning risk indicatorsThe contract risk management solution• Identifies and quantifies potential changes

– Scope– Quality– Cost– Schedule

• Ensures that decisions about potential changes to scope, schedule, cost are made by the right people, at the right time, in the right sequence

Our solution: Automated workflow on the shared platformFiatech Global Forum | 2016

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Workflow improves efficiency and risk transparency

Change Order Process • Business processes defined for communications that carry potential risk e.g. Technical Queries, Change Order Requests, Applications For Payment, Claims

• Approval sequences improve efficiency and traceability

• Accommodates delegated authority policies

Decisions about potential change made by the right people, at the right time, in the right sequence

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Aggregating Contract Risk Management Metrics across Project Portfolio

Organization

Business Unit 1

Project Alpha

Contract A1

Contract A2

Project Bravo

Contract B1

Contract B2

Business Unit 2

Project Charlie

Contract C1

Contract C2

Project Delta

Contract D1

Contract D2

Change Order

RequestsClaims Applications for

PaymentTechnical Deviation

Requests

Standardization and workflow allows potential megaproject contract risk data to be rolled up across:• All major

contracts• All

projects/depts• All

assets/business unitsFiatech Global Forum | 2016

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ProCon Analytics Insights

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[EXAMPLE OF REPORTS]

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ProCon: Claim Management

Leveraging the communication audit trail to manage and defend against claims:

• A complete communication audit trail is fundamental to managing and defending claims

• Acts as the tamper-proof independent source of truth

Our solution: automated commercial audit trail on the shared platform

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Managing and defending against claims

Independent source of truth acts to minimize and defend against claims

ProCon preserves the “red thread” of personal and corporate responsibility through the chain of communications linked to contract obligations.

Owner Operator

ProCon O

perator Portal

ProCon C

ontractor Portal$

ContractorDISCIPLINE

• Risks• Reviews• Schedule

Impact• Who?• Responsible• Accountable• Consulted• Informed• Instructed• When?• Compliance• Supporting

Documents• Decisions• Obligations

Claims defense – “building a better bundle”Traceability of every decision, linked to supporting evidence, in context, and time lined.

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Summary: the importance of contractual communications when building megaprojects

• Large complex capital projects in this low oil price climate require proactive contract risk management. Improve what is within your control.

• Communications are governed by contractual obligations• Communications provide early warning indicators of risk• Clarity, consistency and timeliness build good contractual relationships• Standardization is key to improving transparency, efficiency and reporting

cross-project contract risk• A complete communication audit trail is fundamental to managing and

defending against claims

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Thank You! Questions?

Adina Anwar Senior Contract Manager – Major Capital ProjectsShell Projects and Technologyadina.anwar@shell.com

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