Case Study
A Papua New Guinea joint venture valued at $US19 billion
- Industry: Global Oil & Gas
- Expertise: Megaproject Success
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.
At A Glance
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.
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.
More of what we did
- The recruitment of an executive team to lead and transform a business to the world stage.
- The formulation of a business and organisational development strategy that progressed the business, year on year, to the realization of the vision.
- The engagement of financial and commercial banking professionals to fund the growth and provide advice for progression to international listing.
- Designing an enabling culture that respected and honoured the national population and environment in Tanzania and Botswana.
- Modelling of staffing options, town infrastructure and mine construction that would result in a smooth transition from exploration company to exploration and production.
- Developing management and leadership abilities through programs, inductions, team exercises and occupational skills training
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.