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STRATEGIC ADVICE FOR PHASING OF PROJECT IMPLEMENTATION

strategic advice business

Client’s challenge

The downstream arm of a prominent national oil company in the GCC was executing two mega projects on an accelerated schedule and looking to do an objective assessment over the practicality of proceeding with these plans. Given heightened project activity across the region, there had been concerns that commodities, resources and manpower would be in sudden short supply, thus threatening to derail progress that the project owner had achieved. Our client was struggling to plan and adopt a realistic yet ambitious execution strategy that would promote timely completion and no cost overruns.

It was apparent that lack of effective internal control mechanisms and no best practices to benchmark against success stories in the region was also causing some internal confusion. There remained a visible need to emphasize key strategic objectives that would serve as a long-term execution roadmap for the client.

Our solution

The board of the national oil company engaged Contax Partners to serve in an independent advisory role and assist the company to effectively plan execution of its mega-projects. We assembled a team that included subject matter experts and industry professionals to assist the core execution team in an on-going support role. The consulting team was continually mobilized on-site and worked with stake-holders and experts to understand the different constraints and problems faced by the project owner.

To initiate work on our mandate, we first measured the likelihood of the project’s success using key metrics and parameters that were developed in-house within the Business Advisory unit. Our team leaders observed and evaluated the practicality of the client’s ambitions by engaging at different levels within the organization and also with external resources that would likely play a part during execution. This stage, the survey phase, was a vital component to understand the client’s reality and would be used as an objective parameter to understand overall readiness for execution. We next assessed the GCC project landscape and also provided illustrations of key energy and non-energy mega-projects that would cause a resource bottleneck when the region would see peak workload activity. This macro level assessment allowed the client to view how neighbouring countries would be forced to compete for the same resources over time.

Diving deeper, the consulting team gauged the capabilities and capacity of contractors, sub-contractors and vendors that were prequalified for the project; our mode of review was based on gathering feedback and conducting a rigorous assessment of on-going activities. This then extended into an analysis of availability of heavy equipment, construction vehicles and materials (cement, rebar, asphalt etc.), as well as projected regional demand for key long lead items. Our team also focused on assessing the local and regional labour markets to understand how man-power requirements would be met in the event of a shortfall or if ramped up project activity would require more workers.

Lastly, from our constant engagement with the client, we identified best practices that suited their hierarchy and developed sustainable models of excellence in project delivery. This was aided by regional benchmarks that remained relevant to the client.

Impact on client’s business

Following our presentation, the executive committee of the board realized that execution of two mega-projects in parallel was unsustainable and entirely unrealistic given the country’s limited resources. Based on our recommendations, the client adopted a staggered approach for construction by separating EPC award of the refineries over 12-15 months. Since then, the project owner has been successful in adopting strong internal control mechanisms, such as dedicated project management teams, silos to distribute workload effectively across contractors and a clear roadmap by which the project owner is on the path to successful project execution.

 

LET US HELP YOU SUCCEED IN THE ENERGY MARKET!

 

Contax Partners assists project owners, contractors and suppliers to maximize opportunities associated with these projects, guide them on the underlying risks related to execution and the effects of increasing project workload. 

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Since our establishment in 1985, Contax Partners has been the advisor of choice for companies operating within the constantly evolving Middle East and Africa energy sector. Having operated in the energy market for over 30 years, we have a track record of empowering our clients to win business. Contax Partners is well placed to understand the challenges, and what impact these can have on your growth plans for the Middle East and Africa. 

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