Assignment 1 - Project Management Final Version.pdf

Multicultural Oil Company, Ltd.

Lubricating Oil Blending Plant Project (LOBP Project) Hanoi, Vietnam

Revision History Date of this revision: 3 April 2003 Revision Number 1

Revision Date 3 Apr 03

Date of next revision

Summary of Changes

12 April 2003 Changes marked (N)

Initial Release

Approvals This document requires following approvals. Name Gunter Nimtz

Title Project Manager

Signature

Distribution This document has been distributed to Name Peter Duffy

Title MOC Project Team

Budi Hartono

MOC Project Team

Sian Bjerking

MOC Project Team

Hai Tran

MOC Project Team

Date: 25 Feb 2011 Version: 1.0 Status: Authorised Page: 1 of 40

Lubricant Oil Blending Plant Project

Preface This project plan is the management document for this project. It records the planning for the project and sets out the boundaries in which the Project Manager operates. The project team uses it to ensure the delivery of defined project outcomes. The document will be reviewed and amended to meet changed conditions or objectives during the project’s life span. The project leadership team can only make changes to the project plan and scope with approval from the project sponsor. All these steps represent an effective project scope management, which will help to communicate the objectives and planned details from the project team to all relevant stakeholders of the project. This, in turn, produces certainty that all stakeholders accept the project’s outcome.

This project is hereby authorised.

Jim Smith CEO Multicultural Oil Company Ltd.

Date: 25 Feb 2011 Version: 1.0 Status: Authorised Page: 2 of 40

Lubricant Oil Blending Plant Project

Code of Ethics We, the members of the LOBP Project Team set for ourselves the following standards of conduct in our relationship with our suppliers, our employer, each other and those with whom we work.

In particular:  We intend to comply with the law.  We intend to act honestly.  We will endeavour not to place ourselves in situations which result in divided loyalty.  We intend to use Multicultural Oil Company‟s assets responsibly and in the best interests of Multicultural Oil Company, Ltd.  We intend to respect the rights of the individual and the community in which we work.

We are individually responsible and accountable for our actions and by the way we perform our functions and report the results of our actions.

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Lubricant Oil Blending Plant Project

Contents Preface ............................................................................................................... 2 Code of Ethics .................................................................................................... 3 Contents ............................................................................................................. 4 1.

Background ............................................................................................... 6

2.

Purpose ..................................................................................................... 7

3.

Objectives.................................................................................................. 7

3.1

Primary Objectives .......................................................................................................... 8

3.2

Secondary Objectives ..................................................................................................... 8

4.

Scope Statement ....................................................................................... 9

5.

Exclusions ............................................................................................... 10

6.

Constraints .............................................................................................. 11

7.

Related Projects ...................................................................................... 12

8.

Assumptions ............................................................................................ 13

9.

Broad Strategy ........................................................................................ 13

10.

Phases .................................................................................................... 15

10.1

Engineering & Design................................................................................................ 15

10.2

Procurement .............................................................................................................. 15

10.3

Construction .............................................................................................................. 15

10.4

Commissioning & Start-Up ........................................................................................ 16

10.5

Warranty .................................................................................................................... 16

11.

Key Activity Schedule .............................................................................. 16

12.

Master Budget ......................................................................................... 17

13.

Communications Management Plan ........................................................ 18

13.1

Overview ................................................................................................................... 18

13.1.1

Communications with the sponsor ......................................................................... 19

13.1.2

Communications with functional management ...................................................... 19

13.1.3

Communications with subcontractors .................................................................... 19

13.1.4

Communications within the team ........................................................................... 19

13.2

Media / File Formats.................................................................................................. 21

13.3

Scheduled meetings .................................................................................................. 21

13.3.1

Meeting Standards................................................................................................. 22

13.4

Reporting ................................................................................................................... 23

13.5

Base-lined Documents .............................................................................................. 23

13.6

Contact Information ................................................................................................... 24

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Lubricant Oil Blending Plant Project

14.

Responsibility Matrix................................................................................ 25

15.

Stakeholders ........................................................................................... 25

16.

Risks........................................................................................................ 27

17.

Quality Procedures .................................................................................. 28

18.

Contractual Issues ................................................................................... 28

Annexes ........................................................................................................... 30 Annex 1: Objectives Preference Matrix ................................................................................... 30 Annex 2: Work Breakdown Structure ...................................................................................... 31 Annex 3: Stakeholder Analysis ................................................................................................ 33 Annex 4: Responsibility Matrix ................................................................................................. 38

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Lubricant Oil Blending Plant Project

1. Background The Multinational Oil Company Ltd (MOC) is a wholly owned subsidiary of Shell Oil. Shell Oil is one of the global players in the oil exploration and oil refining industry. While Shell Oil focuses on the exploration of crude oil and the refining of it into major products such as diesel, petrol and kerosene, MOC‟s main emphasis is on the production of lubricant oils. Since 1989, MOC owns and operates several oil processing facilities worldwide. Currently, MOC supplies the South East Asian market from its facilities in the Americas, Europe and Australia. However, market factors, such as supply chain and customer demand, together with changes in the economy, put pressure on the profitability of the lubricant oil industry. Therefore, competitive pricing in the marketplace will continue to increase as major players in the lubricant oil industry fight harder for a bigger share of the 23 million tons worldwide demand. To supply the growing South East Asian market with lubricant oils at a competitive price MOC has decided in cooperation with Shell Oil to establish a new lubricating oil blending plant in South East Asia. Based on locational advantages, MOC will benefit from three factors. First, MOC will take advantage of the lower labour costs, which are substantially lower and will remain lower than in other existing plant locations around the world. Second, due to the short physical distance of the biggest markets within the South East Asian region, such as China, Taiwan and Japan, the transport costs for access to the these markets are significantly reduced. Finally, the supply of the local Vietnamese market benefits from the different tariff imposed on the import of the raw materials for lubricant oils, such as base oil and the finished product. While Vietnam has imposed a tariff of 20% on lubricant oil, the tariff for base oil, an important component for lubricant oil, is only 5%. Only recently, MOC‟s biggest competitors, including AP Oil International Ltd. and BP-Amoco, have started to install their own lubricant oil blending plants in Vietnam. Therefore, MOC‟s planned facility in Vietnam will play a vital role to maintain its actual share in the lubricant oil market of 8% (2001). Although the relative market share will not increase, due to the growing market the absolute market share in volume will increase significantly in the near future. Due to the strategic importance of the new facility in Vietnam, the total capital investment involved in the project will be funded from internal resources. In particular, MOC and Shell Oil provide the required funding.

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Lubricant Oil Blending Plant Project

2. Purpose As mentioned in the „Background‟ of this document the project is undertaken to address the business need of MOC and Shell Oil in the South East Asian market. The strong competition in the lubricant oil market requires MOC in cooperation with Shell Oil to establish a state-of-the-art lubricant oil blending plant in the South East Asian region. The scope of this project includes the designing and establishment of a state-ofthe-art lubricant oil blending plant in Vietnam.

3. Objectives Within the overall purpose of this project to design and establish a new state-ofthe-art lubricating oil blending plant in Vietnam, several particular objectives have to be accomplished. The successful achievement of each individual goal is crucial to guarantee a competitive position in the South East Asian market and to gain a global reputation.

RESULTS

OBJECTIVES

MARKS

A

17

E

15

D

14

B

9

J

8

C

6

H

5

G

4

I

3

F

2

K

0

Although all goals are important to secure a highly competitive position, the primary goals are necessary to fulfil the minimum requirements of the LOBP Project. The additional accomplishment of the secondary goals would further improve the competitive position. The distinction between primary and secondary goals is based on the preference matrix (see Annex 1). Figure 3.1 shows the results of the preference matrix including the objectives and the marks for each of those. The goals A, E, D, and B are classified as primary objectives and the remaining ones are secondary goals.

Figure 3.1 Objectives Preference Matrix

Date: 25 Feb 2011 Version: 1.0 Status: Authorised Page: 7 of 40

Lubricant Oil Blending Plant Project

3.1 Primary Objectives The primary objectives are: A) The lubricant oil blending plant‟s installed capacity will be 40,000 metric tons per annum to produce international quality lubricants that meet all of the domestic market needs. Although the initial capacity will be 40,000 metric tons per annum, the plant has to be prepared for an expansion up to 80,000 metric tons per annum at a future stage. E) To be able to gain a competitive position, the cost of the project must not exceed six million dollars and the annual fixed costs of the installed facility should be around $200,000. D) This project should be completed within 12 months including the stages from the initial design to the commissioning. B) The plant will include a bulk storage of 4,000 metric tons that is in line with the blending facility.

3.2 Secondary Objectives The secondary objectives are: J) Provide a 12 months warranty from start of operation. C) A laboratory completely equipped with the most modern scientific instruments and capable of analysing lubes to extremely fine detail, controlling the quality of lubes to determine its qualitative aspects has to be built on the same premises. H) Train the employees. G) The plant should be committed to produce and supply lubricants in a safe and healthy environment for employees. I) The concept of the plant should be dedicated to the protection of the environment by development of less toxic products and a range of biodegradable oils, participating in the collection and the treatment of used oils, and treating of polluted grounds. F) In order to integrate the facility into the new company‟s global information network, the plant should include a state-of-the-art information system with a global interface. K) International and local contractors will supply the blending plant in modular sections while only local contractors will build infrastructure facilities

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Lubricant Oil Blending Plant Project

4. Scope Statement The vital role of the LOBP Project is to coordinate various activities to design and establish a new state-of-the-art lubricant oil blending plant in Vietnam. In particular, activities range from the detailed engineering and design, to the procurement and handling of supply and contractors, to construction monitoring and inspection and to the final commissioning. Additionally, the LOBP Project includes the initial training of the employees during the commissioning phase. In order to be successful, several project deliverables have to be accomplished. These project deliverables have been listed in the sections above titled „Primary Objectives‟ and „Secondary Objectives‟. Figure 4.1 shows the project scope and structure in a graphical format. Multicultural Oil Company, Ltd.

We are here

MOC ~ the owner

MOC‟s LOBP Project Team

CRA

ENGINEERING / DESIGN (basic & detailed) BY LOBP Project Team

MECHANICAL CIVIL

PROCUREMENT, SUPPLY & HANDLING

CRA

FABRICATION & CONSTRUCTION

OUTSOURCING

PURCHASING & EXPEDITING

VEND OR #1

CHEMICAL ELECTRICAL & INSTRUMENT

1.1 Project executor FIELD

CRA

PRE-COMMISIONING COMMISIONING START-UP

WARRANTY CLAIM RESPONSE

(12 months)

BY LOBP Project Team

MECHANICAL VEND OR #2

VEND OR #3

VEND OR …

BY LOBP Project Team

GOVERNMENT‟S

CIVIL

APPROVAL

CHEMICAL ELECTRICAL & INSTRUMENT

Legend CRA

Checking, Review, Approval

Direct labour Indirect labour

Figure 4.1 Project Execution Planning

Date: 25 Feb 2011 Version: 1.0 Status: Authorised Page: 9 of 40

Lubricant Oil Blending Plant Project

5. Exclusions The LOBP Project is clearly confined to the design and establishment of the lubricant oil blending plant. Several associated facilities and matters are explicitly excluded from this project. These exclusions are: 

The external transport infrastructure for raw materials and finished products to and from the plant is excluded.



No bottling and canning of products is to be undertaken within this plant.



This project is not involved in the operating of the facility.



MOC‟s Logistics Department supplies the required raw material for testing and commissioning.



The integration of the plant within the company‟s hierarchy and customer network is excluded.

Date: 25 Feb 2011 Version: 1.0 Status: Authorised Page: 10 of 40

Lubricant Oil Blending Plant Project

6. Constraints In accomplishing the objectives of the LOBP Project various constraints would have to be considered beforehand. Although the constraints do negatively impact on the project‟s cost, time and planning effort, the consideration of the constraints will guarantee the success of the project. In particular, those constraints are: 

The local supply of electricity, water and telecommunication is not 100% reliable. Therefore, additional contingency equipment, such as an electricity generator, water tank and filter, have to be installed.



It has to be a state-of-the-art facility, which means that it cannot be copied from any existing plant. Furthermore, all required components have to be new.



Due to the already approved site in the industrial zone in Hanoi, the size and the shape are given and cannot be changed.



The total cost of the new plant must not exceed 6 million US dollars.



The project has to be completed within 12 months.



Use of local contractors, which means limited choice of proven quality of contractors.



Import of required high-tech equipment results in higher costs and longer lead times due to transport.



Local labour market does not provide adequate skilled worker. Therefore, an extended training period is required.



Requirement of high occupational health and safety standards.



Measures to avoid polluting the environment including oil leakage from tanks and pipelines and toxic chemicals.



Complex regulation by the local government to get the final approval for operation.



This project does not cover the training of other employees than those involved in operating the technical functions of the plant.

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Lubricant Oil Blending Plant Project

7. Related Projects At the same time as the LOBP Project progresses other related projects are carried out. These projects together with the LOBP Project build a broader system and therefore have to be considered throughout all stages of this project. Due to the strong interrelationships between these projects, there will be special communication measures, as detailed below, between the various projects. Related projects are: 

Bottling and canning plant in Hanoi, Vietnam: The bottling and canning plant will be located on a nearby site in Hanoi. It will use the finished products of the lubricant oil blending plant as its inputs. Therefore, the lubricant oil blending plant treats the bottling and canning plant as another major customer. This, in turn, results in cooperation between both in regard to the product quality and quantity.



Logistics improvement including the external transport of the lubricating oil blending plant: In order to reduce the transport costs within the whole supply and distribution process a further project addresses this issue. A major concern for the logistic improvement team is the supply of raw materials to the lubricant oil blending plant in Hanoi and the distribution within the South East Asian market. Therefore, minor coordination between both projects are necessary.



Global information system: To further strengthen the communication and coordination between the worldwide locations a new global information system will be implemented. The LOBP Project has to put into operation an information system that features the requirements of the global information system. Consultants from the global information system project will give advice on this topic within the appropriate stages.

Date: 25 Feb 2011 Version: 1.0 Status: Authorised Page: 12 of 40

Lubricant Oil Blending Plant Project

8. Assumptions The following assumptions are made in conjunction with the LOBP Project: 

The feasibility study and the financial analysis was undertaken by the relevant department within the general management of MOC in cooperation with Shell Oil. Therefore, no further analysis is necessary.



MOC and Shell Oil provide the complete funding of 6 million US dollars.



The approved site in the industrial zone in Hanoi, Vietnam is accessible by road and by water.



The national and local governments have initially approved the planning and building of the lubricant oil blending plant in the specified area. However, to get the final authorisation prior to commencement of operations further approval documents are necessary.

9. Broad Strategy The Multicultural Oil Company Ltd, the owner of the LOBP Project, has already established a dedicated project team (hereinafter called the LOBP Project team). The LOBP Project team has full authority in executing this particular project. Moreover, all decisions related to this project are the LOBP Project team‟s responsibility. Hence, this team shall provide regular progress reports to the board of directors. Should there be any problems that cannot be resolved by this team or that is beyond its authority, the team should consult the board of directors. During this project, the following project phases will be implemented: 

Engineering



Procurement



Construction



Commissioning & Start-Up



Warranty

Details will be explained in the “Phases” part of this document.

Date: 25 Feb 2011 Version: 1.0 Status: Authorised Page: 13 of 40

Lubricant Oil Blending Plant Project

To comply with quality requirements, appropriate standards and procedures will be applied along with closed supervision from the LOBP Project team. The following local standards will be applied: 

Law on the Protection of the Environment – 27/12/93



Vietnam State Regulations on Environment Standards 1995



Vietnamese Fire fighting & prevention standards; TCVN-2622, TCVN5738



Procurement regulations and Decree 43/CP-16/7/96



Regulation on construction and investment administration and Decree 42/CP-16/7/96



Ministry of Construction Circular – 01/BXD-CXCD-15/4/97



Circular on technology transfer – 28 TT – 22/1/94



JIS, and other applicable standards

In order to minimize the project cost, approved local resources (material & manpower) will be utilised. It is also encouraged to produce bulk material-takeoff as accurate as possible to minimise unnecessary costs. The design of the plant will be compact to reduce bulk materials consumption, with consideration of some technical and non-technical aspects (e.g. maintainability, operation ability, accessibility, reliability, safety, security as well as aesthetics). In addition, a smart strategy in procurement (e.g. vendors binding, negotiation) will be applied to reduce the prices for equipment and materials. To comply with the planned overall project duration, the Concurrent Engineering method (the flying start) will be implemented. By implementing the Concurrent Engineering strategy, it is not necessary to create a linear schedule and to use over-the-wall approach. An overlapping activity schedule will be used with consideration of any possible risks. The critical path on the schedule shall be closely monitored. Since time is not a critical dimension among the three dimensions (cost, quality and time) for the LOBP Project, any shortcoming in the other dimensions will have to be offset by sacrificing time. However, performance on all three dimensions is vital in order to achieve the best results on this project. A sound risk assessment will be applied during the preliminary stage of the project execution to identify any potential problems as well as to develop a contingency plan (e.g. HAZOP ~ Hazardous Operating Procedure). Within all stages of this project the accommodation of future needs (e.g. plant expansion) is considered. Furthermore, the Life Cycle Analysis (LCA) (i.e. implementing social, economic, environmental assessment & strategy) will also be addressed.

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Lubricant Oil Blending Plant Project

10. Phases As mentioned in the broad strategy, the LOBP Project is divided into five major phases.

10.1 Engineering & Design 

The engineering and design will be done on an in-house basis by the LOBP Project team with support from internal experts.



Within the engineering and design phase two sub-phases exist that will be carried out subsequently. The first sub-phase is the basic engineering and the second the detailed engineering.



During and at the end of this phase applicable reviews, checks and approval procedures will be undertaken to guarantee high quality and compliance with all objectives.



In order to achieve maximum results, all available resources, such as manpower, knowledge database, engineering software, will be fully utilised.

10.2 Procurement 

All procurement activities will be handled and monitored by the LOBP Project team.



The appropriate procedure, including requisition, quotation, bidding, purchase order, will be followed to ensure that all items purchased comply with the project quality specification.



For each procurement process a detailed strategy will be developed to reduce delivery time. This is especially important for long-lead items.

10.3 Construction 

To share risk and improve efficiency, it was decided that sub-contractors would carry out all construction activities.



The LOBP Project team will coordinate and supervise all construction activities on a day-to-day basis.

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Lubricant Oil Blending Plant Project

10.4 Commissioning & Start-Up 

The LOBP Project team will execute the commissioning and the start-up with supervision from an approved independent institution to get Government‟s final approval.



Throughout this phase of the project the LOBP Project team will provide on-site training to future operators.



The final documentation (as-built documents) will be finalised during this phase.

10.5 Warranty 

During the warranty period (12 months, after project completion), a member of the LOBP Project team will be assigned to handle all claims from the plant operations management.



All applicable procedures shall be done in response to those claims.

11. Key Activity Schedule The key activity schedule follows the five phases that were explained in the previous part. Each phase is structured into sub-phases and activities to clearly identify all required steps. Annex 2 presents the work breakdown structure, which contains a detailed picture of the key activities.

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Lubricant Oil Blending Plant Project

12. Master Budget Figure 12.1 shows the components of the budget in accordance with the overall estimated and approved budget for the LOBP Project of 6 million US dollars. Direct Labor Positions Project manager Engineering manager Lead Engineer Engineering engineer P&E manager P&E officer CST Manager CST Lead engineer Adm&Fin. Manager Adm&Fin. Officer

Numbers 1 1 4 9 1 2 1 5 1 2

Salary per month 3,000 1,500 1,000 700 1,500 600 1,500 1,000 1,500 600

$ $ $ $ $ $ $ $ $ $

12 months 36,000.00 18,000.00 48,000.00 75,600.00 18,000.00 14,400.00 18,000.00 60,000.00 18,000.00 14,400.00

Equipments Construction Electricity Laboratory Materials for commissioning Others

$ $ $ $ $ $

3,200,000.00 1,200,000.00 320,000.00 400,000.00 100,000.00 20,000.00

Consultant Travelling Training Office equipments Maintenance

$ $ $ $ $

30,000.00 60,000.00 50,000.00 256,000.00 43,600.00

$

6,000,000.00

Total Figure 12.1

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Master Budget

Lubricant Oil Blending Plant Project

13. Communications Management Plan The Communications Management Plan details the generation, collection, dissemination and storage of all communication and information activities that take place during the project, including regular meetings and reporting. Its purpose is to ensure that all the project stakeholders and team members receive all the information they need in a timely manner.

13.1 Overview A number of communication channel models have been identified. These include both formal and informal communication paths. Figure 13.1 shows the basic communications model for the LOBP-Vietnam project management team.

Upward Communication to MOC Ltd Executive Board

Lateral Communications to peers, other functional groups and customers

LOBP-Vietnam Project Manager

Lateral Communications to community, social groups, and other

secondary organisations

Downward communications to subordinates and MOC Project office

staff

Figure 13.1

Date: 25 Feb 2011 Version: 1.0 Status: Authorised Page: 18 of 40

Basic Communications Model LOBP-Vietnam.

Lubricant Oil Blending Plant Project

The basic forms of communication will include both formal and informal written and verbal styles. Table 13.1 classifies the forms of communication used by the MOC LOBP project. Formal Written

Project Charter Management Plan

Informal Written

Engineers notes Memos

Formal Verbal

Presentations

Informal Verbal

Conversations

Table 13.1

Communication Classification

13.1.1 Communications with the sponsor Communications with the sponsor, Multicultural Oil Company Ltd, is classified as upward communication. Formal means of communication are preferred through the use of the Project Charter and other relevant Management Plans.

13.1.2 Communications with functional management Communications with functional management is lateral communication and is likely to contain all classification styles depending on the situation.

13.1.3 Communications with subcontractors Communications with subcontractors is lateral communication and is to be in the form of both formal and informal written communication. Where verbal communication is used it is to be followed up and confirmed in a written form.

13.1.4 Communications within the team Communications within the team will be both lateral and subordinate and will mostly be in the form of both written and verbal informal style. Furthermore, Figure 13.4 shows the structure of the project team, which is helpful in identifying the communication pattern within the team.

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Lubricant Oil Blending Plant Project

PROJECT DIRECTOR

Note: this graph indicates the job roles. It is possible for one person to take more than one job role.

PROJECT MANAGER

PROJECT CONTROL MANAGER

QA/QC MANAGER

… CONSTRUCTION MANAGER

…

PROCUREMENT MANAGER

…

ENGINEERING MANAGER

…

MECH. LEAD ENGINEER

…

…

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COMMISSIONING MANAGER

…

PIPING LEAD ENGINEER

Figure 13.4

FINANCE MANAGER

CIVIL LEAD ENGINEER

…

…

ELECT LEAD ENGINEER

…

PROJECT ENGINEER

…

Project Team Structure

Lubricant Oil Blending Plant Project

13.2 Media / File Formats The following table details the accepted electronic file formats to be used by the project team. The MOC information support cell has a limited ability to convert many different file formats into the projects accepted file format whenever the need arises, such as files received from external sources. Document Type Documents, letters, manuals, etc. (source version) Spreadsheets Project Schedules Presentations Archive Files

File Format MS Word 2000 or compatible MS Excel 2000 or compatible MS Project 2000 or compatible MS PowerPoint 2000 or compatible .pdf and .zip, or compatible

13.3 Scheduled meetings A number of scheduled meetings have been identified and are detailed below. MEETING Purpose Location Frequency Chairperson Minutes by Attendees Agenda Minutes copied to Media MEETING Purpose Location Frequency Chairperson Minutes by Attendees Agenda Minutes copied to Media

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Project Leadership Meeting. To discuss project activities, progress and issues. To discuss long-range project management issues. MOC Asia-Pacific Regional Headquarters. Brisbane Australia. First Thursday of every other month. Commencing at 0900 hrs. Duration 3 hrs. Gunter Nimtz Budi Hartono Representatives from Shell, MOC Headquarters, LOBP Project team and other invited attendees Long term planning and performance issues All Attendees and CEO MOC Ltd Minutes produced in MS WORD 2000 and distributed by e-mail.

Weekly Project Management Meeting To discuss project activities, progress and issues. To review upcoming work, expected issues and risks. MOC Asia-Pacific Vietnam Headquarters. Every Wednesday Commencing at 1600 hrs. Duration 2 hrs. Gunter Nimtz Hai Tran Gunter Nimtz, Hai Tran, Sian Bjerking, Budi Hartono, Peter Duffy Project planing issues All Attendees Minutes produced in MS WORD 2000 and distributed by e-mail.

Lubricant Oil Blending Plant Project

MEETING Purpose

Location Frequency Chairperson Minutes by Attendees Agenda Minutes copied to Media

Daily Production Meeting To discuss project activities, progress and issues on a daily basis. To inform stakeholders of daily program of work and associated hazards and risks. To be on hand to address issues on site before they become problems. On Site Project Office Daily commencing one week before production phase start at 0800hrs with a duration of 1 hr Peter Duffy Sian Bjerking All relevant contractor / stakeholder representatives On site OH&S and environmental and daily coordination issues over the next 1-2 days All Attendees Minutes produced in MS WORD 2000 and distributed by e-mail.

13.3.1 Meeting Standards The following dot points describe the standards for all meetings: 

An agenda will be developed for planned meetings.



The agenda and support materials will be sent out no later than 48 hours prior to the scheduled meeting start time.



The meeting will have a meeting leader/facilitator, note taker and timekeeper. Where possible different people should cover these roles.



Come prepared to the meetings, review the agenda and support materials in advance.



Be on time for meetings and remain present throughout its duration.



Start and stop the meeting at scheduled times.



Announce arrival when joining a teleconference.



Identify yourself before speaking.



Summarise the action items, responsibilities and due date before the close of the meeting.



Within 48 hours after close of meeting send out minutes which clearly identify action items, responsibilities and due dates.

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Lubricant Oil Blending Plant Project

13.4 Reporting The following formal status reports are to be generated by the project manager or his representative. REPORT

Project Status Report

Purpose

Highlight project progress to date. Recognise outstanding performance by teams and individuals throughout project. Community Liaison Every Three Months Peter Duffy All Stakeholders as per stakeholder matrix MS WORD 2000 Glossy Print

Frequency Author Distributed to Media

13.5 Base-lined Documents Base-lined documents or processes are those that cannot be modified without using the change control process. They serve as foundation information for the LOBP – Vietnam Project as a whole and are used to track progress and achievement of objectives. The LOBP – Vietnam base-lined documents are: 

Project Charter.



Project Schedule.



Work Breakdown Structure.



Communications Management Plan.



Quality Management System.



Roles and Responsibilities.



Change Control Processes.



Risk Management Data Base.

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Lubricant Oil Blending Plant Project

13.6 Contact Information Org.

Name

Phone Number

Fax Number

Email Address

MOC

Gunter Nimtz

0434528764

0734525436

[email protected]

MOC

Peter Duffy

0401321004

0734525436

[email protected]

MOC

Hai Tran

0433712898

0734525436

[email protected]

MOC

Budi Hartono

0443543245

0734525456

[email protected]

MOC

Sian Bjerking

0432177572

0734525456

[email protected]

MOC

Jim Smith

0456563254

0734523456

[email protected]

Shell

John Kline

0423456543

0256467365

[email protected]

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Comment

CEO

Lubricant Oil Blending Plant Project

14. Responsibility Matrix The responsibility matrix is based on the work breakdown structure. Each component can have single or multiple responsibilities. The basic responsibility for each task lies within the LOBP Project team. Nonetheless, other entities can be responsible to provide consulting or approval activities. A detailed list of the responsibilities can be seen in Annex 4.

15. Stakeholders This section identifies the stakeholders of the LOBP Project. In order to appropriately deal with all issue that impact on or involve stakeholders a detailed stakeholder analysis is provided at annex 3. In particular, the following stakeholders have been considered:

Primary Stakeholders 

Multinational Oil Company Ltd



Shell Oil



Project Team



Subcontractors



Vendors/Suppliers



Employees/Labour Union



Customers



Users



Local Community

Secondary Stakeholders 

Management of Industrial Zone in Hanoi



Local Government



National Government



Environmental Groups

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Furthermore, Figure 15.1 groups the various stakeholders into four groups assessing their active or passive attitude for or against the LOBP Project.

Figure 15.1

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Stakeholders

Lubricant Oil Blending Plant Project

16. Risks Throughout all phases of the LOBP Project various risks exist and threaten to reduce or delay the success of the project. Table 16.1 shows the initially identified risks and assesses their level of risk on a scale from low to high. Additionally, mitigation approaches are determined to provide measures that limit the exposure to each risk. A full analysis is provided in the risk management plan.

Level

Activities

Mitigation approaches H M

L

1. Vendors supply low quality products and deliver not on time.

H

Close supervision, clear and detailed contract and schedule. Provide alternatives.

2. Delay of shipment of equipments and materials due to customs procedures possible.

H

Closely working with customs office, if necessary, negotiate delay with the stakeholders.

3. Agree with labour union about working conditions such as annual leave, bonus, maternal leaves, salary, rights and obligations of both employer and local employees.

H

Getting advice and information from consultants with local and international expertise.

4. Off-specifications equipments and construction not implemented exactly as the approved design. Delay in installation and construction.

H

Clear contract, close monitoring and supervision. Provide alternatives.

5. Negotiating with industrial zone owner the electricity and water supply for the facility.

H

Closely monitor negotiations, if necessary considering of alternatives.

6. Negotiating with Environmental Agency and local community about issues such as noise, gas emission, and wastewater.

M

Getting advice and information from consultants.

7. Negotiating with vendors and material suppliers of a contract to deliver before deadline.

M

Closely monitor the negotiations. Provide alternatives.

8. Commissioning

M

Closely monitor if necessary, negotiate delay with the stakeholders.

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9. Lack of team work

M

Clear organizational structure, clear individual responsibilities, and incentive programs to get more commitment from each member.

10. Uncertainty of legislation

M

Detailed risk analysis, provide back up planning.

11. Uncertainty of weather

M

Detailed risk analysis, provide back up planning.

12. Project Scope changes required due to client requests and new technical considerations.

M

Clear statement of tasks. Discuss and negotiate changes with the stakeholders.

13. Negotiating with sub-constructors of contract to deliver before deadline.

M

Closely monitor the negotiation. Provide alternatives.

14. Getting the MOC‟s approval of the engineering design.

L Discuss and recheck carefully, if

15. Recruiting local professional staff before commissioning

L On site training current and future

Table 16.1

necessary, negotiate MOC for delay.

with

the

local staff

Risk Assessment

17. Quality Procedures Quality procedures are in accordance with MOC‟s quality manual. In addition, the LOBP Project will utilise all appropriate local or international standards.

18. Contractual Issues Significant parts of the LOBP Project will be contracted to other suppliers and manufacturers. These areas include procurement, supply and handling, field fabrication and construction as shown in Figure 4.1. These issues are addressed separately in the procurement strategy document.

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Annexes

Annex 1: Objectives Preference Matrix

ANALYSIS

Objectiv es

A

A B C D E F G H I J

B

C

D

E

F

G

H

I

J

K

A2

A2

A1

A1

A2

A1

A3

A1

A1

A3

B1

D2

E2

B1

B1

B2

B1

B1

B2

D2

E2

C1

C1

C1

C1

J1

C2

E1

D2

D1

D2

D1

D1

D3

E2

E1

E2

E1

E1

E3

G1

H1

I1

J2

F2

H1

G1

J1

G2

H1

J1

H2

J1

I2 J2

K

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Annex 2: Work Breakdown Structure 1.0

Lube Oil Blending Plant (LOBP) Project 1.0.1 Engineering 1.0.1.1 Process 1.0.1.1.1 Basic Design (P&ID, PFD) 1.0.1.1.2 Calculation & simulation 1.0.1.1.3 Process Data Sheet 1.0.1.2 Civil 1.0.1.2.1 1.0.1.2.2 1.0.1.2.3

Specification & Calculation Engineering Drawings Civil Requisition & Material Take-Off

1.0.1.3 Mechanical 1.0.1.3.1 Specification & Calculation 1.0.1.3.2 Loading Data 1.0.1.3.3 Engineering Drawings 1.0.1.3.4 Mechanical Requisition & Material Take-Off 1.0.1.4 Piping 1.0.1.4.1 Basic Engineering (Plot Plan, General Layout) 1.0.1.4.2 Detailed Engineering Drawing 1.0.1.4.3 Piping Requisition & Material Take-Off 1.0.1.5 Electrical & Instrument 1.0.1.5.1 Basic Engineering 1.0.1.5.2 Detailed Engineering Drawing 1.0.1.5.3 Electrical & Instrument Requisition & Material Take-Off 1.0.2 Procurement, Supply & Handling 1.0.2.1 Civil 1.0.2.1.1 Piles 1.0.2.1.2 Steel Structure 1.0.2.1.3 Rebar 1.0.2.1.4 PVC Pipe 1.0.2.1.5 Grating 1.0.2.2 Mechanical 1.0.2.2.1 Main Equipment 1.0.2.2.2 Pumps 1.0.2.3 Piping 1.0.2.3.1 1.0.2.3.2 1.0.2.3.3 1.0.2.3.4 1.0.2.3.5 1.0.2.3.6 1.0.2.3.7

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Pipes Fittings Valves Pipe Support Materials Gaskets, Bolts & Nuts Special Pipe Items Fire Fighting

Lubricant Oil Blending Plant Project

1.0.2.4 Electrical & Instrument 1.0.2.4.1 Diesel Engine Generator 1.0.2.4.2 Switchgear & MCC 1.0.2.4.3 UPS 1.0.2.4.4 Cable Tray 1.0.2.4.5 Wire 1.0.2.4.6 Lighting 1.0.2.4.7 Fire Detection System 1.0.2.4.8 CCTV 1.0.2.4.9 Control Valve 1.0.2.4.10 Pressure Regulators 1.0.3 Construction & Field Fabrication 1.0.3.1 Manpower Mobilization 1.0.3.2 Temporary Facilities 1.0.3.3 Site Preparation 1.0.3.4 Piling 1.0.3.5 Steel Structure Erection 1.0.3.6 Equipment Erection 1.0.3.7 Piping Fabrication 1.0.3.8 Piping Erection 1.0.3.9 Electrical & Instrument Installation 1.0.4 Site Commissioning & Start-up 1.0.4.1 Commissioning 1.0.4.2 On-site training 1.0.4.3 Final Documentation

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Annex 3: Stakeholder Analysis In this part the stakeholder analysis is presented. First, the strengths and weaknesses of the LOBP Project are identified. Second, the opportunities and threats that arise from the environment are documented. Finally, for each stakeholder the relevant information and the needs for this particular stakeholder are presented. Strengths: 

Subsidiary of Shell Oil (well recognised company and a global player in the oil exploration and oil refining industry);



MOC has an already well established market in South East Asia;



Management of Industry in Hanoi is very supportive of new projects in area, encourages the growing industry.



Strong engineering design background.

Weaknesses: 

It is the first project in Vietnam for MOC and the LOBP Project team. The LOBP Project team is unexperienced in doing business in Vietnam.



The LOBP Project team lacks experience in dealing with customs and official agencies.

Opportunities 

Lower labour costs in Vietnam;



Low transport costs due to the short physical distance of the biggest markets within the South East Asian region, such as China, Taiwan and Japan;



Low tariff the Vietnamese market imposes on the import of raw materials.



Will create opportunities for locals to obtain jobs at the plant.



Vietnam is a member of ASEAN. Hence, no import/export tax is imposed on trade between those countries.

Threats 

Competing Lubricating Oil Blending Plants such as AP Oil International Ltd. and BP-Amoco;



Opposed Environmental Groups.



Refer also to “Risks”

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Multinational Oil Company Ltd Information: MOC owns and operates several oil processing facilities worldwide; MOC currently supplies the South East Asian market from its facilities in the Americas, Europe and Australia, and will greatly benefit from establishing a new lubricating oil plant in Vietnam because of the advantages of its locality and also in order to rival competitors. Needs: Building of Plant to be accomplished in shortest time frame possible; Project and product to be of highest quality; Cost of building plant to be as low as possible.

Shell Oil Information: Shell oil is the owner of MOC, hence will profit from the new facility in Vietnam. Needs: Building of Plant to be accomplished in shortest time frame possible; Project and product to be of highest quality; Cost of building plant to be as low as possible.

Project Team (Project Manager and Team Members) Information: Responsible for managing the project. Needs: Facility when completed to be of a high quality of work that meets or exceeds MOC‟s expectations; Project to be completed within expected time period; Work with dedicated, highly skilled and trusted team of employees.

Subcontractors Information: Will profit from work they will be contracted to do on the site. Needs: Clear task and payment description; Clear understanding of all contractual agreements.

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Vendors/Suppliers Information: Will profit from selling products to MOC required in order to complete project. Needs: Clear task and payment description; Clear understanding of all contractual agreements.

Employees/Labour Union Information: Will earn money from being employed to work on project. Needs: Healthy and safe work environment; Acceptable wages, social security, health insurance and working hours.

Customers Information: Will profit from buying and selling products produced by MOC at Hanoi Plant. Needs: Reliable products with constant quality; reasonable priced products.

Users Information: Will directly use the projects products. Needs: Reliable products with constant quality; reasonable priced products.

Local Community Information: Either will be supportive of project because they can see the benefits to themselves (ie. create jobs in the area); Or will be opposed to the project because will be concerned about negative impacts on the community and environment. Needs: Assurance that the project will have no negative impacts on the environment and value of property in the area, and the local‟s quality of life; Assurance that the facility will create jobs and/or have a positive impact on property in the area.

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Strategy: Assure the locals of MOC and Shell Oil‟s good reputation worldwide; Ease concerns about negative impacts to the community and environment by using examples of other communities worldwide thriving from the advantages of having a MOC Oil Lubricating Plant in the area (ie. jobs created, no environmental concerns).

Management of Industrial Zone in Hanoi Information: Industrial zones (IZ) are special zones set up by the Vietnamese Government to enhance industrial production. The zones also offer favourable tax treatment and hence new investments are readily encouraged. Needs: An Investment licence must first be obtained before a company may operate in Hanoi. These licences are easy to obtain, by submitting an application to the local IZ management board.

Local Government Information: The local government in Hanoi supports foreign investment as it means bringing of capital into Vietnam and stimulating employment in the region. Needs: An Investment licence must first be obtained before a company may operate in Hanoi. These licences are easy to obtain, by submitting an application to the local IZ, EPZ management boards or by application to the Ministry of Planning and Investment (MPI).

National Government Information: The National Government of Vietnam actively supports the development of industry, by the designation of Industrial Zones and Export Processing Zones. These zones serve as incentives for foreign investment in the country by offering favourable tax treatment. Needs: An Investment licence must first be obtained before a company may operate in Hanoi. These licences are easy to obtain, by submitting an application to the local IZ, EPZ management boards or by application to the Ministry of Planning and Investment (MPI).

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Environmental Groups Information: Opposed to the establishment of the oil refinery, because of possible adverse affects on the surrounding environment. Needs: Assurance that the project will have no negative impacts on the environment, both in the plant construction and in the operation of the plant in the future. Assurance of site rehabilitation if need be in the future. Assurance of proper disposal and storage of all by-products and waste. Strategy: Assure environmental groups of MOC and Shell Oil‟s good reputation worldwide; Provide environmental groups with an outline of all byproducts and waste disposal policies and emergency procedures; Assure environmental groups of MOC‟s commitment to minimising disturbances to the surrounding environment during and after construction.

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Annex 4: Responsibility Matrix 1

responsible

2

support

4

notification

3

consult

5

approval

Organisation

Activity

1.0.1

Engineering

1.0.1.1

Process

TFPT

CVL

MECH ELINS

PIP CNSL

1.0.1.1.1 Basic Design (P&ID, PFD)

1

3

1.0.1.1.2 Calculation & simulation

1

3

1.0.1.1.3 Process Data Sheet

1

3

1.0.1.2.1 Specification & Calculation

1

3

1.0.1.2.2 Engineering Drawings

1

1.0.1.2.3 Civil Requisition & Material Take-Off

1

1.0.1.2

1.0.1.3

Civil

Mechanical

1.0.1.3.1 Specification & Calculation

1

1.0.1.3.2 Loading Data

1

1.0.1.3.3 Engineering Drawings

1

1.0.1.3.4 Mechanical Requisition & Material Take-Off

1

1.0.1.4

Piping

1.0.1.4.1 Basic Engineering (Plot Plan, General Layout)

1

1.0.1.4.2 Detailed Engineering Drawing

1

1.0.1.4.3 Piping Requisition & Material Take-Off

1

1.0.1.5

3

3

Electrical & Instrument

1.0.1.5.1 Basic Engineering

1

1.0.1.5.2 Detailed Engineering Drawing

1

1.0.1.5.3 Electrical & Instrument Requisition & Material Take-Off

1

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3

Lubricant Oil Blending Plant Project

1.0.2

Procurement, Supply & Handling

1.0.2.1

Civil

1.0.2.1.1 Piles

1

1.0.2.1.2 Steel Structure

1

1.0.2.1.3 Rebar

1

1.0.2.1.4 PVC Pipe

1

1.0.2.1.5 Grating

1

1.0.2.2

Mechanical

1.0.2.2.1 Main Equipment

1

3

1.0.2.2.2 Pumps

1

3

1.0.2.3

Piping

1.0.2.3.1 Pipes

1

1.0.2.3.2 Fittings

1

1.0.2.3.3 Valves

1

1.0.2.3.4 Pipe Support Materials

1

1.0.2.3.5 Gaskets, Bolts & Nuts

1

1.0.2.3.6 Special Pipe Items

1

1.0.2.3.7 Fire Fighting

1

1.0.2.4

Electrical & Instrument

1.0.2.4.1 Diesel Engine Generator

1

1.0.2.4.2 Switchgear & MCC

1

1.0.2.4.3 UPS

1

1.0.2.4.4 Cable Tray

1

1.0.2.4.5 Wire

1

1.0.2.4.6 Lighting

1

1.0.2.4.7 Fire Detection System

1

1.0.2.4.8 CCTV

1

1.0.2.4.9 Control Valve

1

1.0.2.4.10 Pressure Regulators

1

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3

Lubricant Oil Blending Plant Project

1.0.3

Construction & Field Fabrication

1.0.3.1

Manpower Mobilization

1

1.0.3.2

Temporary Facilities

5

1

1.0.3.3

Site Preparation

5

1

1.0.3.4

Piling

5

1

1.0.3.5

Concrete Foundation

5

1

1.0.3.6

Steel Structure Erection

5

1

1.0.3.7

Equipment Erection

5

1.0.3.8

Piping Fabrication

5

1

1.0.3.9

Piping Erection

5

1

1.0.3.10 Electrical & Instrument Installation

1

5

1

1.0.4

Site Commissioning & Start-up

1.0.4.1

Commissioning

1

5

1.0.4.2

On-site training

1

3

1.0.4.3

Final Documentation

1

3

legend TFPT Task Force Project Team CVL

Civil Subcontractor

MECH Mechanical Subcontractor ELINS Electrical / Instrument Subcontractor PIP

Piping Subcontractor

CNSL Consultant

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