Stage Gate

7/14/2019 Stage Gate

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Stage Gate Gamij

Gated process of large E&P players for project delivery

1

Stage-gate variant

FeasibilityConcept

selectionSanction

Ready for

start-upGates

•Appraise •Select •Define •Execute •Operate

•Feasibility

•Evaluation

and

selection

•FEED &

Detailed

design

•Constru-

ction•Operation

•Identify and

select

alternatives

•Generate

and select

alternatives

•Develop

alternatives•Execute

•Operate

and evaluate

•Identify and

assess

•Select •Define •Execute •Operate

Company

• Key

objectives of

phase

• Evaluate

feasibility and

commercial

viability of

development

• Generate,

select and

propose

concept

• Define concept

and finalize

cost, schedule

and technical

specifications,

and obtain

sanction

• Design, build

and

commission

facility/asset

within agreed

parameters

• Safe start-up

and final

proving of

facilities ready

for steady-

state



Stage Gate Gamij

Invented by Robert G. Cooper in 1980’s. Oil & Gas industry

adopted this after 2000 onwards.

Stage-1 : Identification and Assessment of Opportunities.

Stage-2&3 : Development Planning stages

Stage-4 :Execution of the Development Plan

Stage-5 :Management of Production Operations

Stage-gate PMP – in general

2



Stage Gate Gamij

Role of Project Teams & Executive Decision Board -

Stage-gate PMP helps organization -

In ensuring that all data/deliverables are available beforemoving to next stage

Defines the points & procedures for making management

decisions based on economics/supporting information from

Project Teams whether to proceed or to short close it


3



Stage Gate Gamij

Model showing how shareholder value is created,

beginning with identification and ending with valuedelivery –

Companies using Stage-gate PMP under different names


4



Stage Gate Gamij

• CPDEP - Chevron Project Development and Execution Process

• OPREP – Woodside Opportunity and Project Realisation Process

• ORP – Shell Opportunity Realisation Process

• CVP – BP’s Capital Value Process

• OM - Exxon-Mobil’s Opportunity Management Process

• VAF – BG Group Value Assurance Framework

• ACES - Anadarko Capital Effectiveness Systems

• CVP – Statoil’s Capital Value Process

• SGM – OMV Stage Gate Manager

• MPMP - Marathon Project Management Process

• SQAD - Santos Quality Asset Development Process

• AGP - Apache Gate Process, in development

• Stage Coach – Mustang Engineering’s method to support Owners systems

• IPA - Stage Gate Capital Value Processes (FEL 1 -5) – Recognised Independent method of measurement

• PMBOK ( Project Management Book of Knowledge ) – 4th Edition Chapter 2

• SPE – Recognised by the Society of Petroleum Engineers ( SPE 102926 )

• IHRDC – Online Training courses in Stage Gate Competencies

• Ernst & Young – “Capital Projects life cycle” – www.ey.com/GL/en/Industries/Oil--Gas/Capital-

Projects-life-cycle

This is an accepted Industry Standard……

5



Stage Gate Gamij

Recommended Stage-gate PMP for ONGC

Gate

1

3

4

5

6

7

8

CR ( Concept Report)

FDP (Field Development Plan)

Commencement

Steady state

Discovery

Commerciality

RFSU

( Ready For Start up)

Reserves

Execute

Define

(detail FR)

Select

Concept

Reserve

Appraisal

Explore to

Discover

Commission

& Start-up

Steady state

Operations

Commerciality

Assessment

Stage2

6


http://slidepdf.com/reader/full/stage-gate-563279f24d799 7/16Stage Gate Gamij

Stage 1: EXPLORE to DISCOVER

The objective of this stage is to establish hydrocarbons in the acreage. In thisstage G&G data is analyzed, probable locations for exploration are finalized and

exploration well program is executed to confirm the discovery. Revision of drilling

exploration portfolio after completion of drilling is undertaken. The decision of

whether the discovery merits further appraisal will be taken.

FPR(Gate Keeper) – Basin Manager; Gate Owner :-Director (Exploration)

Stage 2: RESERVE APPRAISAL

The objective of this stage is to reduce geological uncertainty so that further

development can be planned. In this stage, an appraisal program is chalked out to

drill further exploration wells for the purpose of delineation of the reservoir/ field.

Based on which the geological model is reviewed and reservoir characterization is

carried out. In this stage, commerciality of the discovery is established and decisionto develop further will be taken. Reservoir volumes are refined and firmed up for

development.

FPR(Gate Keeper) – Basin Manager; Gate Owner :-Director (Exploration)

Details of Stages (1/4)

7



Stage 3: COMMERCIALITY ASSESSMENT

The objective of this stage is to prove feasibility & commerciality of the fielddevelopment. In this stage simulations and dynamic modeling are done extensively.

Preliminary feasibility of facilities and development well are studied. Based on which

commercial analyses are carried out for various price scenarios. At the end of this

stage, declaration of commerciality (DOC) will be submitted to DGH.

FPR(Gate Keeper) – Chief NMFD; Gate Owner : Dir (Exploration)

FPR(Gate Keeper) – Asset Manager; Gate Owner - Dir (Offshore)/ Dir (Onshore)

Stage 4: SELECT CONCEPT

The objective of this stage is to select best development concept from range of

options for reservoir management & facilities etc. In this stage, facility & well concept

studies, flow assurance studies, contract strategy and risk management processes arecarried out. Commercial analyses conducted and cost estimates are worked out. At the

end of this stage, plans for technology, preliminary wells, stake holder management,

Scope of work and contracting strategy are finalized. In principle approval of Concept

Report (CR) is the major outcome of this stage.

FPR(Gate Keeper) – Asset Manager; Gate Owner - D (Off)/ D(On) and D(Expl)


8



Stage 5: DEFINE DETAILED FEASIBILITY REPORT

The objective of this stage is to generate and get approval of Field DevelopmentPlan (FDP). In this stage, detailed field development plan consisting of Front End

Execution Design (FEED), Functional & technical specifications, well designs,

cementing, Drilling policies etc. HAZOP / HAZID are carried out. Commercial

analyses for the project are conducted. Government approvals, environment

clearances, regulatory approvals are obtained in this stage.

FPR(Gate Keeper) – Asset Manager; Gate Owner - D (Off)/ D(On) and D (Expl)

Stage 6: EXECUTE & BUILD

The objective of this stage is to build and make facility ready for startup as per

schedule. In this stage all contracts are awarded and executed. The facilities are

commissioned. Regulatory approvals are obtained for startup. At the end of this

stage, the facilities are ready for startup and handed over to the concerned Asset bythe executing agency. Asset Development Board (ADB) releases the development

well locations which are drilled by the Drilling services.

FPR(Gate Keeper) – Asset Manager; Gate Owner - D (Off)/ D(On)


9



Stage 7: COMMISSION & START UP

The objective of this stage is to commission the facilitiesand drilling of wells will be completed and finally, production

will be started. In this stage, facilities are hooked up with

pipe lines etc., HAZOP/ HAZID status are some of the

activities undertaken.

FPR(Gate Keeper) – Asset Manager; Gate Owner : D (Off)/ D(On)

Stage 8: STEADY STATE OPERATIONS

The objective of this stage is to attain steady state in the

operations and handover accountability of operations to the

Asset Group. In this stage, reservoir management plan,

field surveillance plan & well optimization plans are

implemented.

FPR(Gate Keeper) – Asset Manager; Gate Owner : D (Off)/ D(On)


10



Each checklist is divided into 8 broad criteria - Objective Gate criterion/ decision

Governance Gate owner

Gatekeeper

Data/ tools availability

Focus activities

Detailed activities/ execution approach

Review mechanism Internal peer review External Review

Key deliverables & documentation

Provision of exception report

Salient Features of Checklists

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I t d ti f Ph & St G t

http://localhost/var/www/apps/conversion/tmp/AppData/Local/Temp/Review%20Methodology%20&%20Panel.docx



Introduction of Phases & Stage GatesAbility to control from start to finish, ability to assess risk, ability to assign

roles & responsibilities more clearly

ExploreAppraise/

AssessSelect

Commerciality

1 2

DiscoveryGATE

PHASE

Identify leads,

prospects and

acquire acreage

Prove

commerciality of

development over

range of likely

outcomes

Generate, select

and propose

concept (Reservoir

evacuation and

Facilities)Objective

Key

activity

Prospect evaluation

Data acquisition,

and feasibility

studies

Define range of

reserves and

economic range of

development

options

Data acquisition

and feasibility

studies

DOC approval

Concept selection

studies

Contracting strategy

Approach market for

key contracts

KeyQuestion atclosure Gate

“Does this align

wi th the business

object ives and d o

we know what we

are getting into?”

“Do we have at

least one

commercial ly

feasible

development?”

“Have we selected

th e

correct/opt imal

concept?”

ConceptSelect

Define Execute Operate

RFSU

Detail technical

definition to be able

to place detail

design contracts

Establish sales

agreements

Obtain sanction

Project mgmnt

Deliver facilities,

handover to

operations

Operations

readiness

Regulatory

approvals

Final hot

commissioning &

introduction of

hydrocarbons

Production and

optimisation of plant

operating methods

“Is everything in

place to ensure

success?”

“Are we ready to

star t up and is

everything safe?”

Define concept and

finalise cost,

schedule and

technical

specifications and

obtain project

sanction

Design, build and

commission facility/

asset within agreed

parameters and

hand-over to

operations

Safe start-up and

final approval to

facilities ready for

steady state

Project closeout

3 4 5

FID

12



Key Decision to be made

Resource Category

Class of Estimate

Focus Activities ( Level 1 )

Key Deliverables

Objective of Phase

Key Activity

Peer Reviews

Phase Gates – Key Decision PointsSub-Gates – Handover Points

What is the Gate Plan / Roadmap….?

13



Definition of Select Phase Activities &

Deliverables

Deliverables (Subject to Project Size & Complexity)•Concept Selection Report

•Statement of Requirements

•Concept Risk Assessment

•FDP prepared and ready for OC submission

•Development Budget

•PEP for Define Phase Inc Level 2 Schedule & Class 4 Cost

•Prelim Well Plan

•Technology Plan

•Risk Register & plan

•Regulatory Approvals Plan

•Stakeholder Management Plan

•Prelim CR Management Plan & Compliance Report

•Operations Philosophy

•Contracting Strategy

•Updated economics

•Lessons Learned review & Compile

•AFE for subsequent Phase

Focus Activities•Facility and Wells Concept Studies

•Flow assurance studies

•Environmental Studies & data acquisition

•Carryout PHSER 1

•Initiate Risk Management Process

•Prepare contracting strategy•Seek EOI’s / Markey survey

•Commence Contractor prequalification

•Alignment with JVP’s

•Facility & Wells concept studies.

•Pipeline Route Studies

•Prepare and gain approval of Statement of Requirements

•Plan & Budget for subsequent Phase

•Finance planning and sign off on tax offsets

•Sales strategy

ExploreAppraise/

AssessSelect

Commerciality

1 2

Discovery Concept Select


RFSU

3 4 5

Select

Objectives•Generate, Select and Propose Concept

(Reservoir evacuation and Facilities)•Generate FDP

Key Decisions•Submit FDP for Approval

•Agree contracting strategy

•Gate 3 - Agree Concept and initiate definition phase.•Authorise Funds for next Phase

“Have we selected the correct/optimal concept?”

14

f f f &



Definition of Define Phase Activities &

Deliverables

Deliverables (Subject to Project Size & Complexity)•Final Business Proposal inc Updated Economics

•Approved FDP

•Project Specifications, Codes & Standards

•Asset/Operating Plan

•PEP Inc Level 3 Schedule & Class 3 Cost & Performance Metrics

•Interface Management Plan

•Risk Management Plan

•Quality Assurance Plan•HAZOP / HAZID

•HSE Plan & Contractor HSE MP

•Emergency Response Plan (ERP)

•CR Management Plan & Compliance report

•Public Consultation Plan (PCDP)

•Major Contracts recommendations

•Environmental Clearance

•Lessons Learned review & Compile

•AFE for Construct Phase

•Oil/Gas/LNG sales agreement (HOA)

Focus Activities•Finalise basis of design

•Finalise well basis of design

•FEED/ Technical & Functional specifications

•Mobilise project team / project office

•Secure land (onshore) contingent on final investment decision

/ ROU’s

•Execution Planning

•Government & Environmental approvals

•Implement Management of Change

•Prepare contracts / T&C’s / Scopes of work

•Finance sign-off on contracts - Tax efficiencies

•Tender & Review all major facility contracts

•Tender & review all drilling/wells contracts

•Define long lead item commitment plan

•Engage Operations Manager

•Prepare Oil/Gas sales agreement(s)

ExploreAppraise/

AssessSelect

Commerciality

1 2

DiscoveryConceptSelect


RFSU

3 4 5

Select

Objectives

•Gain approval of FDP•Fully define concept including FEED &

tendering of main packages.

Key Decisions•Gate 4a – Handover from Developments to Projects

•Gate 4 – Agree state of readiness to proceed•Authorise funds for full sanction of Project

“Is everything in place to ensure success?”

15



Recommendations & Way forward (1/2)

Stage-gate PMP is recommended for both Green field &

Brown field development projects. All future and current development projects proposed to be

executed with Stage-gate PMP .

Templates for each stage deliverables & underlying process

to be prepared.

Empowerment: Project Leaders with L-III powers under CRC.

Resourcing: As per MDT structure proposed.

Outsourcing of services & empanelment to fill skill gap through

fast track process as under.

IOGPT – for Operations & Facilities

IRS – Reservoir simulation & management

IDT – Drilling/mud technology

IEOT – GeoMechnical

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Documents

Stage Gate