S-041 - Project Cost and Schedule Assurance Review
Introduction
The Opportunity/Project Realization Process is widely used in the oil & gas, mining and other industries to develop and mature large, complex capital projects. Key features of the process are the decision gates during which project sponsors / decision executives determine whether the Opportunity/Project has been progressed sufficiently to pass to the next stage.
In the early phases, the question to be addressed is ‘Are we doing the Right project?’
Around and after sanction time the focus will be on ‘Are we doing the project Right?’
In answering these questions, decision executives will seek assurance on relevant Technical, Economical, Commercial, Organisational and Political aspects and risks.
One of Triple EEE’s successful services is to help clients with leading and/or participating in independent, multi-discipline integrated Project Value Assurance or Stage Gate Reviews, typically with a duration of 1 week and at relatively high level because of the breadth of topics to be reviewed in the short time.
As/when required, separate more in-depth, single-discipline peer reviews can be organised for specific, high risk and technical subjects just before or in parallel with a Value Assurance Review.
Example subjects are Hydrocarbon Volumes and Cost & Schedule estimates, which in all phases of the project lifecycle have direct impact on the Economics.
Purpose
A Triple EEE Project Cost & Schedule Assurance Review provides an independent assurance to the project sponsor/decision executive that – commensurate with the stage/gate of the project – cost and schedule estimates adequately and realistically reflect the Opportunity/Project Scope as well as Risks and are compliant with the client’s project standards and guidelines.
A Cost & Schedule Assurance Review can only be executed when an appropriately detailed project cost estimate and schedule/logic are available, prepared on basis of completed conceptual design work. Timing thus is at the end of an Opportunity/ Project Realization Process phase, just before or in parallel with a Value Assurance Review.
It is typically led by an experienced, multi-discipline project services/controls professional, supported by cost and schedule estimating experts. Most importantly the review team is sourced independently, ideally a mix of outside company and outside project team personnel.
A Cost & Schedule Assurance Review presents an ideal opportunity for the training of 1 or 2 local cost and schedule estimating staff, who can join the review team as additional attendee and can both contribute and learn.
The review itself consists of a detailed investigation of relevant documents, followed by on-site interviews of relevant staff. Corresponding with the Opportunity/Project Realization Process phase the review will focus on whether the cost estimate and schedule are of appropriate detail as well as quality and whether they provide a balanced view of project Scope, Execution Strategy and related Risks & Uncertainties.
On one hand whether the impact of the identified Technical and Non-technical Risks is calculated and reflected correctly.
On the other hand whether sufficient and realistic stretch is included in the form of scope, cost and schedule saving targets. As such, the cost and schedule estimates are typically reviewed as a low-likely-high range.
