assignment 1 - project management final version.pdf

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Date: 25 Feb 2011 Lubricant Oil Blending Plant ProjectVersion: 1.0Status: AuthorisedPage: 1 of 40

Multicultural Oil Company, Ltd.

Lubricating Oil Blending Plant Project (LOBP Project)

Hanoi, Vietnam

Revision History

Date of this revision: 3 April 2003 Date of next revision 12 April 2003

RevisionNumber

RevisionDate

Summary of Changes Changesmarked

1 3 Apr 03 Initial Release (N)

Approvals

This document requires following approvals.

Name Title SignatureGunter Nimtz Project Manager

Distribution

This document has been distributed to

Name TitlePeter Duffy MOC Project Team

Budi Hartono MOC Project Team

Sian Bjerking MOC Project Team

Hai Tran MOC Project Team




PrefaceThis 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 documentwill 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 relevantstakeholders 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.




Code of Ethics

We, the members of the LOBP Project Team set for ourselves the followingstandards of conduct in our relationship with our suppliers, our employer, eachother 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 waywe perform our functions and report the results of our actions.




ContentsPreface ............................................................................................................... 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




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




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 refiningindustry. While Shell Oil focuses on the exploration of crude oil and the refiningof it into major products such as diesel, petrol and kerosene, MOC‟s mainemphasis is on the production of lubricant oils. Since 1989, MOC owns andoperates several oil processing facilities worldwide. Currently, MOC suppliesthe South East Asian market from its facilities in the Americas, Europe and Australia.

However, market factors, such as supply chain and customer demand, togetherwith changes in the economy, put pressure on the profitability of the lubricant oilindustry. Therefore, competitive pricing in the marketplace will continue to

increase as major players in the lubricant oil industry fight harder for a biggershare of the 23 million tons worldwide demand.

To supply the growing South East Asian market with lubricant oils at acompetitive price MOC has decided in cooperation with Shell Oil to establish anew lubricating oil blending plant in South East Asia. Based on locationaladvantages, MOC will benefit from three factors. First, MOC will takeadvantage of the lower labour costs, which are substantially lower and willremain 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 localVietnamese market benefits from the different tariff imposed on the import of theraw materials for lubricant oils, such as base oil and the finished product. WhileVietnam has imposed a tariff of 20% on lubricant oil, the tariff for base oil, animportant 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 inVietnam. Therefore, MOC‟s planned facility in Vietnam will play a vital role tomaintain its actual share in the lubricant oil market of 8% (2001). Although therelative 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 capitalinvestment involved in the project will be funded from internal resources. Inparticular, MOC and Shell Oil provide the required funding.




2. Purpose

As mentioned in the „Background‟ of this document the project is undertaken toaddress the business need of MOC and Shell Oil in the South East Asian

market. The strong competition in the lubricant oil market requires MOC incooperation with Shell Oil to establish a state-of-the-art lubricant oil blendingplant in the South East Asian region.

The scope of this project includes the designing and establishment of a state-of-the-art lubricant oil blending plant in Vietnam.

3. Objectives

Within the overall purpose of this project to design and establish a new state-of-the-art lubricating oil blending plant in Vietnam, several particular objectiveshave to be accomplished. The successful achievement of each individual goalis crucial to guarantee a competitive position in the South East Asian marketand to gain a global reputation.

Although all goals are important to secure a

highly competitive position, the primary goals arenecessary to fulfil the minimum requirements ofthe LOBP Project. The additionalaccomplishment of the secondary goals wouldfurther improve the competitive position.

The distinction between primary and secondarygoals is based on the preference matrix (see Annex 1). Figure 3.1 shows the results of thepreference matrix including the objectives andthe marks for each of those. The goals A, E, D,

and B are classified as primary objectives andthe remaining ones are secondary goals.

Figure 3.1 Objectives Preference Matrix

RESULTS

MARKS

A 17

E 15

D 14

B 9

J 8

C 6

H 5

G 4

I 3

F 2

K 0

OBJECTIVES




3.1 Primary Objectives

The primary objectives are:

A) The lubricant oil blending plant‟s installed capacity will be 40,000 metric tonsper annum to produce international quality lubricants that meet all of thedomestic market needs. Although the initial capacity will be 40,000 metrictons per annum, the plant has to be prepared for an expansion up to 80,000metric tons per annum at a future stage.

E) To be able to gain a competitive position, the cost of the project must notexceed six million dollars and the annual fixed costs of the installed facilityshould 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 withthe 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 scientificinstruments and capable of analysing lubes to extremely fine detail,controlling the quality of lubes to determine its qualitative aspects has to bebuilt on the same premises.

H) Train the employees.

G) The plant should be committed to produce and supply lubricants in a safeand 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 ofbiodegradable oils, participating in the collection and the treatment of usedoils, and treating of polluted grounds.

F) In order to integrate the facility into the new company‟s global informationnetwork, the plant should include a state-of-the-art information system with aglobal interface.

K) International and local contractors will supply the blending plant in modularsections while only local contractors will build infrastructure facilities




4. Scope Statement

The vital role of the LOBP Project is to coordinate various activities to designand establish a new state-of-the-art lubricant oil blending plant in Vietnam. In

particular, activities range from the detailed engineering and design, to theprocurement and handling of supply and contractors, to construction monitoringand inspection and to the final commissioning. Additionally, the LOBP Projectincludes 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 „PrimaryObjectives‟ and „Secondary Objectives‟.

Figure 4.1 shows the project scope and structure in a graphical format.

ENGINEERING/ DESIGN

(basic &detailed)

PROCUREMENT,SUPPLY &HANDLING

FIELDFABRICATION &CONSTRUCTION

PRE-COMMISIONINGCOMMISIONINGSTART-UP

WARRANTYCLAIM RESPONSE (12 months)

MECHANIC AL

CIVIL

CHEMICAL

ELECTRICAL &INSTRUMENT

BY LOBP Project PURCHASING &EXPEDITING

VEND

VEND

VEND

VEND

OUTSOURCING

MECHANICAL

CIVIL

CHEMICAL

ELECTRICAL &INSTRUMENT

BY LOBP Project Team BY LOBP Project Team

GOVERNMENT‟S

Multicultural Oil Company,Ltd.

MOC ~ the ownerMOC‟s LOBP Project Team

We are

here

Figure 4.1 Project Execution Planning

CRA CRA CRA

CRA

Legend

Checking,

Review,Approval

Direct labour

Indirect labour




5. Exclusions

The LOBP Project is clearly confined to the design and establishment of the

lubricant oil blending plant. Several associated facilities and matters areexplicitly excluded from this project.

These exclusions are:

The external transport infrastructure for raw materials and finished productsto 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 testingand commissioning.

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




6. Constraints

In accomplishing the objectives of the LOBP Project various constraints would

have to be considered beforehand. Although the constraints do negativelyimpact on the project‟s cost, time and planning effort, the consideration of theconstraints 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 electricitygenerator, 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 benew.

Due to the already approved site in the industrial zone in Hanoi, the size andthe 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 ofcontractors.

Import of required high-tech equipment results in higher costs and longerlead 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 tanksand pipelines and toxic chemicals.

Complex regulation by the local government to get the final approval foroperation.

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




7. Related Projects

At the same time as the LOBP Project progresses other related projects arecarried out. These projects together with the LOBP Project build a broader

system and therefore have to be considered throughout all stages of thisproject. Due to the strong interrelationships between these projects, there willbe special communication measures, as detailed below, between the variousprojects.

Related projects are:

Bottling and canning plant in Hanoi, Vietnam:

The bottling and canning plant will be located on a nearby site in Hanoi. Itwill use the finished products of the lubricant oil blending plant as its inputs.

Therefore, the lubricant oil blending plant treats the bottling and canningplant as another major customer. This, in turn, results in cooperationbetween both in regard to the product quality and quantity.

Logistics improvement including the external transport of the lubricating oilblending plant:

In order to reduce the transport costs within the whole supply anddistribution process a further project addresses this issue. A major concernfor the logistic improvement team is the supply of raw materials to thelubricant oil blending plant in Hanoi and the distribution within the South East

Asian market. Therefore, minor coordination between both projects arenecessary.

Global information system:

To further strengthen the communication and coordination between theworldwide locations a new global information system will be implemented.The LOBP Project has to put into operation an information system thatfeatures the requirements of the global information system. Consultantsfrom the global information system project will give advice on this topicwithin the appropriate stages.




8. Assumptions

The following assumptions are made in conjunction with the LOBP Project:

The feasibility study and the financial analysis was undertaken by therelevant department within the general management of MOC in cooperationwith 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 byroad and by water.

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

9. Broad Strategy

The Multicultural Oil Company Ltd, the owner of the LOBP Project, has alreadyestablished a dedicated project team (hereinafter called the LOBP Projectteam). The LOBP Project team has full authority in executing this particular

project. Moreover, all decisions related to this project are the LOBP Projectteam‟s responsibility. Hence, this team shall provide regular progress reports tothe board of directors.

Should there be any problems that cannot be resolved by this team or that isbeyond 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.




To comply with quality requirements, appropriate standards and procedureswill 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, TCVN-5738

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

Regulation on construction and investment administration and Decree42/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-take-off as accurate as possible to minimise unnecessary costs. The design of theplant will be compact to reduce bulk materials consumption, with considerationof some technical and non-technical aspects (e.g. maintainability, operationability, accessibility, reliability, safety, security as well as aesthetics). Inaddition, 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 ConcurrentEngineering method (the flying start) will be implemented. By implementing theConcurrent Engineering strategy, it is not necessary to create a linear scheduleand to use over-the-wall approach. An overlapping activity schedule will beused with consideration of any possible risks. The critical path on the scheduleshall be closely monitored.

Since time is not a critical dimension among the three dimensions (cost, qualityand time) for the LOBP Project, any shortcoming in the other dimensions willhave 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 theproject execution to identify any potential problems as well as to develop acontingency plan (e.g. HAZOP ~ Hazardous Operating Procedure).

Within all stages of this project the accommodation of future needs (e.g. plantexpansion) is considered. Furthermore, the Life Cycle Analysis (LCA) (i.e.implementing social, economic, environmental assessment & strategy) will alsobe addressed.




10. Phases

As mentioned in the broad strategy, the LOBP Project is divided into five majorphases.

10.1 Engineering & Design

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

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

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

In order to achieve maximum results, all available resources, such asmanpower, knowledge database, engineering software, will be fullyutilised.

10.2 Procurement

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

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

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

10.3 Construction

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

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




10.4 Commissioning & Start-Up

The LOBP Project team will execute the commissioning and the start-upwith supervision from an approved independent institution to get

Government‟s final approval.

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

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

10.5 Warranty

During the warranty period (12 months, after project completion), amember of the LOBP Project team will be assigned to handle all claimsfrom 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 theprevious part. Each phase is structured into sub-phases and activities to clearlyidentify all required steps. Annex 2 presents the work breakdown structure,which contains a detailed picture of the key activities.




12. Master BudgetFigure 12.1 shows the components of the budget in accordance with the overallestimated and approved budget for the LOBP Project of 6 million US dollars.

Direct Labor

Positions Numbers Salary per month 12 months

Project manager 1 3,000 36,000.00$

Engineering manager 1 1,500 18,000.00$

Lead Engineer 4 1,000 48,000.00$

Engineering engineer 9 700 75,600.00$

P&E manager 1 1,500 18,000.00$

P&E officer 2 600 14,400.00$

CST Manager 1 1,500 18,000.00$

CST Lead engineer 5 1,000 60,000.00$ Adm&Fin. Manager 1 1,500 18,000.00$

Adm&Fin. Officer 2 600 14,400.00$

Equipments 3,200,000.00$

Construction 1,200,000.00$

Electricity 320,000.00$

Laboratory 400,000.00$

Materials for commissioning 100,000.00$

Others 20,000.00$

Consultant 30,000.00$Travelling 60,000.00$

Training 50,000.00$

Office equipments 256,000.00$

Maintenance 43,600.00$

Total 6,000,000.00$

Figure 12.1 Master Budget




13. Communications Management PlanThe Communications Management Plan details the generation, collection,dissemination and storage of all communication and information activities thattake place during the project, including regular meetings and reporting.

Its purpose is to ensure that all the project stakeholders and team membersreceive all the information they need in a timely manner.

13.1 Overview

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

Figure 13.1 Basic Communications Model LOBP-Vietnam.

Upward

Communication toMOC Ltd Executive

Board

LateralCommunications to

peers, other functional

groups and customers

Lateral Communicationsto community, social

groups, and othersecondary

Downward communications tosubordinates and

MOC Project officestaff

LOBP-VietnamProject

Manager




The basic forms of communication will include both formal and informal writtenand verbal styles. Table 13.1 classifies the forms of communication used by theMOC 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 classifiedas upward communication. Formal means of communication are preferredthrough 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 inthe form of both formal and informal written communication. Where verbalcommunication 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 willmostly 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 inidentifying the communication pattern within the team.




Figure 13.4 Project Team Structure

PROJECTDIRECTOR

PROJECT

MANAGER

PROJECT CONTROL

MANAGERQA/QC MANAGER

MECH. LEADENGINEER

PROCUREMENTMANAGER

CONSTRUCTIONMANAGER

FINANCEMANAGER

COMMISSIONINGMANAGER

ENGINEERINGMANAGER

PROJECTENGINEER

PIPING

LEAD

ENGINEER

ELECT LEADENGINEER

CIVIL LEADENGINEER

… …

… … … …

… …

…

… …

Note: this graphindicates the job roles. Itis possible for oneperson to take more thanone job role.




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 convertmany different file formats into the projects accepted file format whenever theneed arises, such as files received from external sources.

Document Type File Format

Documents, letters, manuals, etc. (source version) MS Word 2000 or compatible

Spreadsheets MS Excel 2000 or compatible

Project Schedules MS Project 2000 or compatible

Presentations MS PowerPoint 2000 or compatible

Archive Files .pdf and .zip, or compatible

13.3 Scheduled meetings

A number of scheduled meetings have been identified and are detailed below.

MEETING Project Leadership Meet ing. Purpose To discuss project activities, progress and issues.

To discuss long-range project management issues.

Location MOC Asia-Pacific Regional Headquarters. Brisbane Australia.

Frequency First Thursday of every other month. Commencing at 0900 hrs. Duration3 hrs.

Chairperson Gunter NimtzMinutes by Budi Hartono

Attendees Representatives from Shell, MOC Headquarters, LOBP Project teamand other invited attendees

Agenda Long term planning and performance issues

Minutes copied to All Attendees and CEO MOC Ltd

Media Minutes produced in MS WORD 2000 and distributed by e-mail.

MEETING Weekly Project Management Meet ingPurpose To discuss project activities, progress and issues.

To review upcoming work, expected issues and risks.

Location MOC Asia-Pacific Vietnam Headquarters.

Frequency Every Wednesday Commencing at 1600 hrs. Duration 2 hrs.Chairperson Gunter Nimtz

Minutes by Hai Tran

Attendees Gunter Nimtz, Hai Tran, Sian Bjerking, Budi Hartono, Peter Duffy

Agenda Project planing issues

Minutes copied to All Attendees





MEETING Daily Produ ct ion Meet ingPurpose 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.

Location On Site Project Office

Frequency Daily commencing one week before production phase start at 0800hrswith a duration of 1 hr

Chairperson Peter Duffy

Minutes by Sian Bjerking

Attendees All relevant contractor / stakeholder representatives

Agenda On site OH&S and environmental and daily coordination issues overthe next 1-2 days

Minutes copied to All Attendees


13.3.1 Meeting Standard s

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 hoursprior to the scheduled meeting start time.

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

Come prepared to the meetings, review the agenda and supportmaterials 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 theclose of the meeting.

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




13.4 Reporting

The following formal status reports are to be generated by the project manager

or his representative.

REPORT Project Status ReportPurpose Highlight project progress to date.

Recognise outstanding performance by teams and individualsthroughout project.Community Liaison

Frequency Every Three Months

Author Peter Duffy

Distributed to All Stakeholders as per stakeholder matrix

Media MS WORD 2000 Glossy Print

13.5 Base-lined Documents

Base-lined documents or processes are those that cannot be modified withoutusing the change control process. They serve as foundation information for theLOBP – Vietnam Project as a whole and are used to track progress andachievement 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.




13.6 Contact Information

Org. Name Phone Number Fax Number Email Address Comment

MOCGunterNimtz

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]

MOCSianBjerking

0432177572 0734525456 [email protected]

MOC Jim Smith 0456563254 0734523456 [email protected] CEO

Shell John Kline 0423456543 0256467365 [email protected]

mailto:[email protected]
























14. Responsibility Matrix

The responsibility matrix is based on the work breakdown structure. Each

component can have single or multiple responsibilities. The basic responsibilityfor each task lies within the LOBP Project team. Nonetheless, other entities canbe responsible to provide consulting or approval activities.

A detailed list of the responsibilities can be seen in Annex 4.

15. StakeholdersThis section identifies the stakeholders of the LOBP Project. In order to

appropriately deal with all issue that impact on or involve stakeholders adetailed 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




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 Stakeholders




16. RisksThroughout all phases of the LOBP Project various risks exist and threaten toreduce or delay the success of the project. Table 16.1 shows the initiallyidentified risks and assesses their level of risk on a scale from low to high. Additionally, mitigation approaches are determined to provide measures thatlimit the exposure to each risk.

A full analysis is provided in the risk management plan.

ActivitiesLevel

H M LMitigation approaches

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 andmaterials due to customs procedurespossible.

H Closely working with customsoffice, if necessary, negotiatedelay with the stakeholders.

3. Agree with labour union aboutworking conditions such as annualleave, bonus, maternal leaves, salary,rights and obligations of bothemployer and local employees.

H Getting advice and informationfrom consultants with local andinternational expertise.

4. Off-specifications equipments andconstruction not implemented exactlyas the approved design. Delay ininstallation and construction.

H Clear contract, close monitoringand supervision. Providealternatives.

5. Negotiating with industrial zoneowner the electricity and water supplyfor the facility.

H Closely monitor negotiations, ifnecessary considering ofalternatives.

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

M Getting advice and informationfrom consultants.

7. Negotiating with vendors and materialsuppliers of a contract to deliverbefore deadline.

M Closely monitor the negotiations.Provide alternatives.

8. Commissioning M Closely monitor if necessary,negotiate delay with thestakeholders.




9. Lack of team work M Clear organizational structure,clear individual responsibilities,and incentive programs to get

more commitment from eachmember.

10. Uncertainty of legislation M Detailed risk analysis, provideback up planning.

11. Uncertainty of weather M Detailed risk analysis, provideback up planning.

12. Project Scope changes required dueto client requests and new technicalconsiderations.

M Clear statement of tasks. Discussand negotiate changes with thestakeholders.

13. Negotiating with sub-constructors ofcontract to deliver before deadline.

M Closely monitor the negotiation.Provide alternatives.

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

L Discuss and recheck carefully, ifnecessary, negotiate with theMOC for delay.

15. Recruiting local professional staffbefore commissioning

L On site training current and futurelocal staff

Table 16.1 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 IssuesSignificant parts of the LOBP Project will be contracted to other suppliers and

manufacturers. These areas include procurement, supply and handling, fieldfabrication and construction as shown in Figure 4.1.

These issues are addressed separately in the procurement strategy document.




Annexes

Annex 1: Objectives Preference Matrix

Objectiv

es A B C D E F G H I J K

A A2 A2 A1 A1 A2 A1 A3 A1 A1 A3

B B1 D2 E2 B1 B1 B2 B1 B1 B2

C D2 E2 C1 C1 C1 C1 J1 C2

D E1 D2 D1 D2 D1 D1 D3

E E2 E1 E2 E1 E1 E3

F G1 H1 I1 J2 F2

G H1 G1 J1 G2

H H1 J1 H2

I J1 I2

J J2

K

ANALYSIS




Annex 2: Work Breakdown Structure

1.0 Lube Oil Blending Plant (LOBP) Project1.0.1 Engineering1.0.1.1 Process

1.0.1.1.1 Basic Design (P&ID, PFD)1.0.1.1.2 Calculation & simulation1.0.1.1.3 Process Data Sheet

1.0.1.2 Civil1.0.1.2.1 Specification & Calculation1.0.1.2.2 Engineering Drawings1.0.1.2.3 Civil Requisition & Material Take-Off

1.0.1.3 Mechanical

1.0.1.3.1 Specification & Calculation1.0.1.3.2 Loading Data1.0.1.3.3 Engineering Drawings1.0.1.3.4 Mechanical Requisition & Material Take-Off

1.0.1.4 Piping1.0.1.4.1 Basic Engineering (Plot Plan, General Layout)1.0.1.4.2 Detailed Engineering Drawing1.0.1.4.3 Piping Requisition & Material Take-Off

1.0.1.5 Electrical & Instrument1.0.1.5.1 Basic Engineering1.0.1.5.2 Detailed Engineering Drawing1.0.1.5.3 Electrical & Instrument Requisition & Material Take-Off

1.0.2 Procurement, Supply & Handling1.0.2.1 Civil

1.0.2.1.1 Piles1.0.2.1.2 Steel Structure1.0.2.1.3 Rebar1.0.2.1.4 PVC Pipe1.0.2.1.5 Grating

1.0.2.2 Mechanical1.0.2.2.1 Main Equipment1.0.2.2.2 Pumps

1.0.2.3 Piping1.0.2.3.1 Pipes1.0.2.3.2 Fittings1.0.2.3.3 Valves1.0.2.3.4 Pipe Support Materials1.0.2.3.5 Gaskets, Bolts & Nuts1.0.2.3.6 Special Pipe Items1.0.2.3.7 Fire Fighting




1.0.2.4 Electrical & Instrument1.0.2.4.1 Diesel Engine Generator1.0.2.4.2 Switchgear & MCC1.0.2.4.3 UPS1.0.2.4.4 Cable Tray

1.0.2.4.5 Wire1.0.2.4.6 Lighting1.0.2.4.7 Fire Detection System1.0.2.4.8 CCTV1.0.2.4.9 Control Valve1.0.2.4.10 Pressure Regulators

1.0.3 Construction & Field Fabrication1.0.3.1 Manpower Mobilization1.0.3.2 Temporary Facilities1.0.3.3 Site Preparation1.0.3.4 Piling1.0.3.5 Steel Structure Erection

1.0.3.6 Equipment Erection1.0.3.7 Piping Fabrication1.0.3.8 Piping Erection1.0.3.9 Electrical & Instrument Installation

1.0.4 Site Commissioning & Start-up1.0.4.1 Commissioning1.0.4.2 On-site training1.0.4.3 Final Documentation




Annex 3: Stakeholder Analysis

In this part the stakeholder analysis is presented. First, the strengths andweaknesses of the LOBP Project are identified. Second, the opportunities andthreats that arise from the environment are documented. Finally, for eachstakeholder the relevant information and the needs for this particularstakeholder are presented.

Strengths:

Subsidiary of Shell Oil (well recognised company and a global player inthe 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 andofficial agencies.

Opportunities

Lower labour costs in Vietnam;

Low transport costs due to the short physical distance of the biggestmarkets within the South East Asian region, such as China, Taiwan andJapan;

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 imposedon trade between those countries.

Threats

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

Opposed Environmental Groups.

Refer also to “Risks”




Multinational Oil Company Ltd

Information: MOC owns and operates several oil processing facilitiesworldwide; MOC currently supplies the South East Asian market from itsfacilities in the Americas, Europe and Australia, and will greatly benefit fromestablishing a new lubricating oil plant in Vietnam because of the advantages ofits 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 lowas possible.

Shell Oil

Information: Shell oil is the owner of MOC, hence will profit from the newfacility 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 lowas 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 orexceeds MOC‟s expectations; Project to be completed within expected timeperiod; 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 allcontractual agreements.




Vendors/Suppliers

Information: Will profit from selling products to MOC required in order tocomplete project.

Needs: Clear task and payment description; Clear understanding of allcontractual 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 atHanoi 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 CommunityInformation: Either will be supportive of project because they can see thebenefits to themselves (ie. create jobs in the area); Or will be opposed to theproject because will be concerned about negative impacts on the communityand environment.

Needs: Assurance that the project will have no negative impacts on theenvironment 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 onproperty in the area.




Strategy: Assur e the locals of MOC and Shell Oil‟s good reputation worldwide;Ease concerns about negative impacts to the community and environment byusing examples of other communities worldwide thriving from the advantages ofhaving 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 VietnameseGovernment to enhance industrial production. The zones also offer favourabletax 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 anapplication to the local IZ management board.

Local Government

Information: The local government in Hanoi supports foreign investment as itmeans bringing of capital into Vietnam and stimulating employment in theregion.

Needs: An Investment licence must first be obtained before a company may

operate in Hanoi. These licences are easy to obtain, by submitting anapplication to the local IZ, EPZ management boards or by application to theMinistry of Planning and Investment (MPI).

National Government

Information: The National Government of Vietnam actively supports thedevelopment of industry, by the designation of Industrial Zones and ExportProcessing Zones. These zones serve as incentives for foreign investment inthe country by offering favourable tax treatment.

Needs: An Investment licence must first be obtained before a company mayoperate in Hanoi. These licences are easy to obtain, by submitting anapplication to the local IZ, EPZ management boards or by application to theMinistry of Planning and Investment (MPI).




Environmental Groups

Information: Opposed to the establishment of the oil refinery, because ofpossible adverse affects on the surrounding environment.

Needs: Assurance that the project will have no negative impacts on theenvironment, both in the plant construction and in the operation of the plant inthe future. Assurance of site rehabilitation if need be in the future. Assuranceof 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 by-products and waste disposal policies and emergency procedures; Assureenvironmental groups of MOC‟s commitment to minimising disturbances to thesurrounding environment during and after construction.




Annex 4: Responsibility Matrix

1 responsible

2 support 4 notification

3 consult 5 approval

ActivityOrganisat ion

TFPT CVL MECH ELINS PIP CNSL

1.0.1 Engineering

1.0.1.1 Process

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 Civil

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

1.0.1.3 Mechanical

1.0.1.3.1 Specification & Calculation 1 3

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 3

1.0.1.4.2 Detailed Engineering Drawing 1

1.0.1.4.3 Piping Requisition & Material Take-Off 1

1.0.1.5 Electrical & Instrument

1.0.1.5.1 Basic Engineering 1 3

1.0.1.5.2 Detailed Engineering Drawing 1

1.0.1.5.3 Electrical & Instrument Requisition & Material Take-Off 1




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 11.0.2.3.7 Fire Fighting 1

1.0.2.4 Electrical & Instrument

1.0.2.4.1 Diesel Engine Generator 1 3

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



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

1.0.3.8 Piping Fabrication 5 1

1.0.3.9 Piping Erection 5 11.0.3.10 Electrical & Instrument Installation 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