You are reading: A Papua New Guinea joint venture valued at $US19 billion
A Papua New Guinea joint venture valued at $US19 billion.
Industry
Global Oil & Gas
Expertise
Megaproject Success
1. Overview
This venture, led by Exxon Mobil, was designed to supply gas from the highlands of Papua New Guinea to the energy hungry markets of Asia.
In addition to navigating the sensitive political, environmental and community hurdles associated with most mega projects, ExxonMobil had to overcome huge geographical and logistical challenges. Hundreds of kilometres of pipeline had to be built from wellheads high in the remote PNG highlands to the coast, and then undersea to a two-train liquefaction plant near Port Moresby. It also had to construct a runway in the highlands big enough to handle Antonov freight planes.
2. At A Glance
$19blifetime value of venture.
6weeks ahead of schedule.
3. The Challenges
What was important to achieve?
We needed to align and coordinate the work of the construction and production arms of the project: ExxonMobil Development and Esso Highland.
Two entirely separate entities with differing priorities and sensitivities, they also answered to different areas of the global oil and gas corporation. Timing was critical if Exxon and its local and international partners were to maintain advantage over alternative global suppliers.
4. The Keogh Approach
Keogh was engaged in 2009 before the final investment decision, acting as a facilitating partner throughout the development phase of the project.
With a large and complex project, Keogh’s work involved facilitating the adoption of a clear set of strategic goals and a longer-term legacy vision for the project; aligning and integrating the work of the development and production companies; and coaching and mentoring the heads and executive teams of the development and production units.
One of our most critical activities was to help in the formation of an integrated development and production leadership team, which became the steering entity for the project.
Proactive planning and organisation development advice to support effective implementation of the project through to project commissioning, planned for July 2014
Development of an overarching transformation strategy and plan to deliver the Legacy Vision 2020 and the Project Delivery Vision 2014
Strategic stakeholder alignment, including the facilitation of joint PNG government and senior executive visioning workshops. Key member of the cost reduction team – achieving savings of $500-million in 6 months.
Management and co-ordination of consultants for the project, providing advice on the appropriate mix, planning and delivery of consulting support
Design and facilitation of the safety leadership programs for ExxonMobil project managers, project consultants, joint venture partners, key executive stakeholders and Health and Safety managers.
5. Summary of the Results
The project was completed six weeks ahead of schedule and almost exactly on budget. The first LNG shipment was made in early May, with 11 cargoes having been despatched ahead of the original planned date for initial shipment.
Our success with the PNG LNG megaproject prompted other long-term engagements, including our current engagement at Woodside.
Megaproject White-Paper
Megaprojects are proliferating around the globe. There are now hundreds of them on land, in the sea and in our skies. Although increasingly commonplace, these megaprojects have a notorious record for budget blowouts and missed completion dates.
We conducted a review of the literature to identify currently cited success factors, and in conjunction with insights derived from our own experience, developed a quantitative and qualitative-based questionnaire.
