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HOW NOT TO RUN A SUBSEA PROJECT By T Freeman, Aker Subsea

A paper presented at Subsea 91 International Conference, 4th-5th December 1991. The prologue This paper is different from the others you will hear or have already heard at this, or possibly any other, conference but it does have the same aim, which is, to help us learn from other peoples experience. The subject is not any particular project or company but rather the whole industry. To set the scene we'll start with a little story. Once upon a time an oil company drilled a hole in the bottom of the sea and found oil. They were very happy and decided that they should bring the oil home and sell it The trouble was the oil company didn't know how to do it so they went to a friendly engineering contractor and said " Please help us get this oil out of the ground ". The engineering contractor said" Yes, that's no problem, we know what to do, it will cost you ten million pieces of fairy gold (10 MPFG) and take three years". The oil company was happy with that so they went away and left the engineering contractor to do the job. The engineering contractor went to see their friends the manufacturers and told them exactly what they wanted and the manufacturers made all the equipment. Three years later the job was done and everyone lived happily ever after. This is, of course, a fairy tale, everyone knows a project doesn't go as easily as this. However, over the last few years I have been asking myself "Why not ?" This paper is the result of some of my musings. It is, by the way, personal and in no way represents the view of any company that I have ever worked for. When you're in the middle of a project and things start going wrong the first reaction, reasonably enough, is to blame everyone else and point out how stupid they are. This is fun but mostly unproductive, anyway, it's not the intention to upset anyone (mostly because I would like to keep my job). For this reason no names are named and the examples are changed from real life to protect the guilty. A history lesson The easiest way to begin to understand the current state of the offshore industry is to look at its history. In the early days very few people in the U.K. knew how to produce oil from the North Sea. The attitude of the oil companies, as in the fairy story, was to leave the engineering to engineering contractors. Because the field was new no one had any experience so the oil companies used the contractors who had served them well for civil engineering work such as the building of refineries. It turned out that building platforms in the middle of the ocean was a very different proposition and projects went over schedule and over budget. The oil companies felt that they had lost control and their response was to hire engineers onto their own staff to work on their behalf and keep control of the engineering contractors. This was probably the correct decision at the time and was unavoidable but it has left a legacy of problems. Where have all the engineers gone ? One problem is a shortage of engineers. There has been a sort of see-saw effect. At first the oil companies had few engineers and the expertise was concentrated in the engineering contractors and manufacturers. The early technical experience came from the U.S.A. and many companies had Texans with big hats and cowboy boots on the premises. For the same reason most of the early engineering companies were either from the U.S.A. or in joint venture with an American

company. As the U.K. based experience increased the oil companies started recruiting. The salaries and conditions were very good and people began to drift from manufacturing, where they had gained the experience, to the oil companies. The see-saw rocked toward the oil companies. A by product of the oil companies having engineers was that they insisted that the engineering companies also have experienced engineers so the engineering contractors also had to recruit from the manufacturers. The result was that each project had to have three sets of specialists in each of the key disciplines, one set for the oil company, one for the engineering contractor and one set consisting of the specialist engineers employed by the manufacturers. There are not, and never were, enough suitably qualified and experienced people to meet this requirement. So, we end up with a picture in which organisations are staffed with a very few experienced engineers doing engineering, a number of people who say they are experienced engineers (because the pay is extremely good) and a number of people who started as engineers but are now project managers. This is, of course, an extremely cynical and jaundiced view but I find cynicism a great comfort. Subsea - sinking to new depths When subsea engineering came along things got worse. The problem with going subsea is not the fact that things are under water, that's fairly trivial, the hard part is making something that will work for twenty years, or so, without any maintenance or even being seen by any Iifeform other than fishes. Making something that reliable needs lots of engineering and attention to detail. At first nobody had the necessary know how so the industry with the best reputation for reliability, aerospace, got involved. In the early days no one believed that the same standards of quality control that were used in the aerospace Industry would be needed for subsea equipment. However, after a few embarrassing failures it was found that in some ways the requirements were higher because aircraft could rely on regular inspection to detect faults. After a few subsea systems had been installed some people had genuine experience. However, no one could know all the systems in sufficient detail to know why certain decisions had been taken, what mistakes had been made and how to avoid them. This led to a phenomenon that I call opinion engineering. If someone had seen or heard of something going wrong or had a bad experience with a company they would say "never again" and put an absolute block on doing the same thing again. This meant that even if the problem had been solved the solution could not be used. This is OK if there is an alternative but sometimes there isn't. Opinion engineering - my part in its downfall Alternatively, an engineer will have been involved with a project in which a certain manufacturers equipment was used. This engineer then assumes that this is the only way to do things and writes a purchase specification accordingly. Any other manufacturer then has the dilemma of either complying exactly with the specification and copying his rivals equipment or offering his own design which is different in detail (and therefore not "spec. compliant") but will provide the same functionality. This makes It difficult for the manufacturers to improve their products because the feedback from the user is not available and the detailed requirements change for every project. In fact many manufacturers never develop a product but redesign their equipment to meet each new clients specification. Although the industry talks about standardisation It will not allow a manufacturer to do the same thing twice even if the fundamental requirements are the same. Opinion engineering causes disagreement, ill feeling and compromise and results in a poor product. If the client were to accept what was offered it would be perfectly adequate and much, much quicker. Nobody's perfect This all assumes that the manufacturers can do their job. Obviously my sympathy is with the manufacturer but only if he is competent and experienced and genuinely capable of getting things right. Some manufacturers are not like that, usually because they have underestimated the

difficulties in some way. In this case perhaps the customer should intervene. The wisdom is knowing when to interfere and when to stand back. The dangers of autograph hunting Another result of the proliferation of engineers is to require approval for everything. Of course, checking is important and necessary but it needs to be kept under control. If a document has lots of spaces for signatures then two things happen: 1) there is immense pressure to "rubber stamp" everything without a proper review especially as if several other people have signed it "it must be alright' and 2) everyone who sees the document makes comments which have to be acted upon and returned for further comment, this can take months as few people are confident enough to sign off a drawing without comment. In any case there is no improvement in the accuracy of the document. A terrible legacy By a process rather like evolution, including some extinctions and many cases of companies getting into bed with one another, manufacturers, engineering contractors and oil companies have found ways to work together. Inevitably there is little trust between any of them and contracts and written procedures become very important. A typical response is to load up a job with as much paperwork as possible to give the illusion that everything has been covered. This often leads to the re-use of purchase specifications. While recycling is very fashionable these days this misuse of specifications is dangerous. Apart from being caught out not changing the clients name every time it appears there is a risk that decisions that were correct for the original project are no longer appropriate. It takes an unusually experienced and confident engineer to question, let alone change, the wording of a venerable and much copied spec. Costs are generally high in the industry because the survivors expect to have to cope with all these problems and charge accordingly. Some have even been known to offer a low price in the knowledge that they can make a substantial profit on variation orders. Companies that charge by the hour comfort themselves that if the customer wants things done a certain way then it's up to him, he's paying for it and to hell with good engineering. Where are we now ? The see-saw appears to be moving back now. The oil companies have recognised that engineering is not their business and many have drastically reduced their engineering staff. The recognition that the effort of the engineering contractor and the manufacturer can be combined has resulted in the beginnings of the turnkey or E.P.C. approach. For E.P.C the engineering contractor is no longer a separate entity although the project management and conceptual engineering that was their traditional role must still be done. However, E.P.C. can only work if the contractor is allowed to provide a product to meet an operational requirement. Opinion engineering is the enemy of E.P.C. Who needs managers ? Engineers can't work in a vacuum. They need the support of administration and management. I am an engineer and have never wished to be a manager so my view of management Is biased. It goes like this: typically companies have an organisation chart which has managers at the top and engineers at the bottom, it seems that this idea of top and bottom has ingrained itself into everyone's mentality so that engineers have lower status and lower pay than managers, the result is that the only route for engineers to advance themselves is to become managers. There is no reason why a good engineer should be a good manager, in fact there may be a conflict because an engineer will become interested in the detail of a job and may neglect the organisational aspects. This also removes engineers from positions in which they can actually do engineering work which further erodes the number available.

Organisation! What organisation ? I dream of a different kind of structure in which the hierarchy is still there not for status but for information flow. In my fairy tale organisation the management have an overview of the engineering design but are not involved in detail. The "higher" up the tree the broader the view but, since even senior managers are only human, this is compensated by a reduction in detailed knowledge. In my ideal company the managers provide a service to the engineers in that they set goals and provide resources, the relationship is on an even footing. In my experience many managers believe that their job is to give orders and to rant and rave (and get ulcers) if they are not obeyed. This might work in the army but it doesn't work well in industry. Most people will do a good job if they know what is wanted and they have the resources to do it. What managers need to realise is that they are an overhead whose purpose is to provide a service to the engineers. It is the engineers that generate income for the company not the management. The managers responsibility is to define what is wanted, provide resources and sit back and bask in the reflected glory of a job well done. This isn't easy and the formal way of dealing with it is called planning. The joys of planning Planning ought to be wonderful stuff enabling managers to follow the progress of the work and to allocate staff and resources as and when necessary to meet the schedule. This doesn't happen. A rough schedule is worked out for the proposal. The schedule is always based on the time things should take if everything goes as expected, contingencies might be allowed but they are only guesses and if they were realistic nobody would get any work. When the job is awarded everyone enthusiastically steams into it because they all know what needs to be done so the planning takes a back seat. About a third of the way into the project the project manager starts to wonder what's happening and asks the planners. They don't know so they ask the engineers. The engineers say everything is 80% complete to get rid of the planners. Everyone is happy. Some time later the planners ask the engineers again and everything is 95% complete. It's funny how the last 5% of a job always takes 50% of the total time available. A project should be planned, before it starts, as part of the bid preparation. This will give the project manager(s) a set of well defined tasks to delegate and enable them to decide what resources are needed. The task definition must include a way of recognising that the job is finished otherwise it will be 95% complete for ever. Deadlines should be set but they must be real. The management technique of setting arbitrary deadlines to gee up the troops is like "crying wolf" and is treated with the same contempt by those who have been subjected to it. Epilogue To sum up, the way forward is for each of the players in the game to recognise their position and stick to it. The oil companies should find oil and sell it. Their responsibility is to identify their requirements and the constraints that they have to work under. The project management, whether they are in an engineering contractor or offering E.P.C., need to recognise that their responsibility is to enable the engineers to do their job. The manufacturers need to ensure that their products are the best possible. Just to show that nothing is new I will leave you with this: "We trained hard but it seemed that every time we were beginning to form up into teams we would be reorganised. I was to learn later in life that we tend to meet any new situation by reorganising, and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization". CAIUS PETRONIUS AD 66

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