Offshore South East Asia 82 Conference
9 - 12 February, Singapore
Erawan Field Project
ManageDlent
by R A Nordquist, Union Oil Co of Thailand
Union onCompany, along with its co-venturer South East Asia Petroleum Exploration Company,
were "on time" and within the original cost estimate upon start-up of gas production facilities in
Erawan Field, Gulf of Thailand. 1bis paper analyzes the planning and strategies used to achieve this
task.
Introduction
Union Oil Company involvement in Thailand dates back to
September 20, 1962 when Union signed the first agreement with the
Royal Department of Mines to explore for petroleum in Thai-
land. Union Oil's first offshore exploratory well drilled in the Gulf
of Thailand in 1973 was the discovery well for the Erawan Gas
Field.
Erawan Field is located in the central portion of the Gulf of Thai-
land in waters 64 meters deep, and 193 kms. east of the Malay
Peninsula and 550 kms. south of Bangkok (see Plate 1). The field is
a north..gouth-trending anticline with east-west structural reversal
of approximately 610 meters, and is approximately 28 kms. long
and 8 kms. wide.
A gas sales agreement was signed with the Thai government in
September 1978. The agreement required drilling the necessary
delineation wells to confinn a minimum of 1.0 trillion cubic feet of
gas reserves. By April 1979, sufficient reserves had been confinned
so that development of the project could be initiated. The gas con
tract date for starting production was October 1, 1981 with best
efforts by both parties to produce and receive production 90 days
prior to the contract date.
The government of Thailand installed a 425-km, 34-inch submarine
pipeline from the Erawan Field to onshore power generation plants
near Bangkok. In addition to power generation, other possible
future uses for the gas are a gas separation plant, ethylene cracking
plant, a fertilizer complex, a soda ash plant, and a sponge iron
plant. Natural gas has a key role in reducing Thailand's future
dependence on imported energy.
The natural gas from this project is sold to the Petroleum Authority
of Thailand (PTI) on an energy unit (BTU) price basis.
Project Definition
The Erawan Field surface facilities consist of: (See Plate 2)
Five well platfonns, each with the capacity for 12 wells.
Four remote process platfonns bridge-connected to the well
platfonns with the necessary equipment to separate the gas well
stream and dehydrate the gas.
One central process platfonns (CPP) to receive production
from each remote well I process platfonn. CPP's support equip-
ment includes condensate stabilization, gas dehydration, gas
compression and metering facilities for gas custody transfer to
PTl';, ':":"i!1';~ pipeline.
One storage barge which receives stabilized condensate from
'CPP' and has equipment un board to meter and pump the
condensate into shuttle tankers that moor alongside.
One 122man living quarters with satellite communications
equipment and recreation facilities.
One flare structure.
- Field pipeline gathering system.
PRODUCTION II
SESSION
Project Objectives
The project had three primary objectives:
1. Production to start on or before the contract date of October 1,
1981.
2, Facilities cost to be consistent with the estimate used in project
economics.
3. Field facilities were to be efficient and consistent with establish-
l!d industry safety and environmental codes.
It was obvious that in order to achieve the "startup'" goal" it would
be necessary for drilling to start January 1980, and that
simultaneous drilling, construction and production activities would
have to occur.
The timing for installation of a well platfonn and a process facility is
not simultaneous. Our experience has been that after receipt of
drawings, a well platfonn can be fabricated, transported and in-
stalled in nine months in South East Asia. However, procurement
of critical process items can take more than 14 months. Drilling,
production and construction activities interfere with each other.
Muds and other corrosive materials from drilling operations are
hard on delicate process equipment and instrumentation. These
timing and intetface problems were solved by separating the weU
platforms from the process platforms. The well platfonns were
installed first so that drilling could start as soon as possible. The
wells are drilled from the well platforms with drilling tender
assistance.
The project was analyzed to identify the cost sensitive variables that
would require close control to stay within the budget and minimize
contractor overruns. These variables are:
1. Preparation of bid documents,
2. Continuity between the onshore and offshore work,
3. Qualifications of vendors and contractors,
4. Governmental regulations and permits,
5. 10b..gite inspection,
6. Changes in plans and scope of work,
7. Adherence to work sched ules,
8. Standardization of facilities,
9. Competitiveness of bids.
Project Environment
The Petroleum Act of 1971 vested powers in a Petroleum Commit-
tee to advise, render opinions and interpretations of regulations,
and secure duty exemptions for imported materials and equipment.
This effective policy resulted in no lost time to the Company or its
contractors with Customs clearances or any delays with the entry .
and departure of personnel and marine equipment.
Project Schedule
A work schedule was prepared working backwards from the gas
contract date of October 1, 1981 (see Plate 3). The work schedule
was analyzed for compression to assure timely completion.
Engineering and design time was compressed by the following
policies:
1. Company representatives at the engineering contractor site
were given authority to approve all drawings and technical
specifications. This "on the spot" approval eliminated time
required to seek Company approvals elsewhere. This
expedited sequential type design work where step--by-step
Company approvals were required.
2. Standardization of design.
- One basic design for five well platforms,
- One basic design for four production jackets,
- One basic design for four process decks.
The basic design for the well platforms had to be modified
only for water depths. The environmental and drilling rig
loads criteria remained the same. Similarly. the basic design
for the production jackets was modified only for water depths
and pipeline riser clamp locations. The process deck layouts
were identical. The custom engineering items such as
separators, glycol sklds, power generator paCKages, etc., were
all laid out and designed to identical criteria. This standardisa-
tion resulted in most drawings requiring only title changes,
thereby reducing the design manhours.
3. Spool drawings and material take-offs.
The design contractor used the time while the bids were being
solicited and evaluated, to prepare spool drawings and
material take-offs. The contracts were written to include
dimensional checks, material take-offs and minor piping
changes as part of the contractors' scope of work. As a result.
the contractors were able to order most of the material shortly
after contract awards.
Bid review and award time compression was more difficult to
achieve. Technical and economic bid reviews were accomplished in
the Home Office so that negotiations and awards could be
completed at "one spot." As a result, most of the contract awards
were made within seven days after receipt.
Oose on-site surveillance at the shop and floor level of vendors
supplying material was maintained for early signs of slippage so
that corrective actions such as longer work hours, more manpower,
air freight, etc. could be taken. This action did not always result in
faster material procurement, but did prevent unexpected vendor
delays.
The fabrication and installation work schedule time compression
was obtained by scheduling a continuous work program with flexi
bility of alternate work in the event that bad weather or other
intenuptions prevented performing the scheduled work.
The start-up of facilities was expedited by early selection of the
operating personnel. The start-up and operation manuals were
provided several months prior to production start-up for training
and orientation sessions. Vendors were called in to explain their
equipment. This compressed start-up time by having operating
personnel familiar with the equipment and the process system.
Resource Requirements
Union elected to manage the project with Company personnel
rather than to employ a project management contractor. Company
personnel were eager to achieve the project goals and were familiar
with Company policies. Staffing of the project team came from the
Operations Group of the Company. After completion of the
project, most of the personnel were transferred into Erawan Field
operations.
The following Company support groups were used to complement
and subsititute for activities which can be performed by
contractors:
1. Purchasing,
2. Research,
3. Fire and Safety.
4. Legal.
Development and training of 'Thai Nationals was considered an
essential part of the resource development for operation of the
Erawan Field. A Human Resources Department was established in
1979, a training center built, and 1bai Nationals recruited and
trained to work on the facilities, both onshore and offshore. The
primary objective of the training program is to develop a skilled
work force to supplement' and eventually replace most of the
expatriates.
Singapore was selected as the staging area for the project because of
its proximity to the job site and its excellent port and Customs fad
lities. The excellent communication facilities and access to vendor
representatives certainly contributed to the project execution and
time compression.
Contracting Plan
The contracting plan for the Erawan project was to obtain
competitive lump sum bids to control expenditures and to minimize
uncertainty in the final cost of the project. The plan included early
selection of a derrick barge to obtain a guaranteed time slot and
maximum allowable lifting weights. Thus, the design was compati-
ble with the selected derrick barge crane capacities.
The project was divided into lump sum bid categories to assure
continuity of work and to fit contractor specilities. These categories
were: jackets, process decks, tanker loading facilities, heavy lifts.
living quarters building and pipe laying.
Contractors interested in bidding were required to submit quali-
fying credentials. Information required financial reports, equip-
ment specifications, yard capabilities, organizational charts, work
experiences and completion dates. Credentials were examined by
the project team, references were checked and only prequalified
contractors were allowed to bid.
Material Procurement Plan
The procurement plan required identification and priority purchase
of all long-lead items and custom engineering items.
The longest lead items required 14 months for delivery to the
fabrication site. Last minute material substitutions were avoided
and uniformity of materials throughout the field was ensured by
early procurement of long~lead items.
The custom engineering items such as separators, condensate
heaters, glycol systems, power generators were all skid~mounted
with inter-connecting piping and instrumentation. Skid work was
spread out among several shops for simultaneous construction to
meet the delivery dates.
High cost items were furnished by the Company. These items such
as cranes, water makers power generators, etc. were Company
preferences and were off-the-shelf items.
Union required full documentation of all materials purchased for
.he project. A frequent problem of material furnished by the
contractors is inadequate documentation. The contractor is
frequently considered to be the end buyer and if warmty problems
occur, the Company must work through the contractor to obtain
service. On this project, Union procured all major equipment with
instructions to ensure that vendors provided complete dossiers. The
dossiers were compiled in hardbound job books and distributed to
all the maintenance and purchasing centers. This concept ensured
effective communication between centers to obtain maintenance
replacements and spare parts. All vendors also submitted
recommended lists of spare parts for commissioning and first year
operation.
During the project life, a bi-monthly material status report was
issued to all project control centers (see Plate 4). To make this
report accurate, it was necessary to make shop visits. It was
frequently found that vendor information obtained over the
telephone was not as accurate as a job-site visit. lltis intelligence
gathering system provided an early warning so that management
could react to a schedule or quality control problem in time for
corrective action.
Quality Assurance Plan
The Company retained the right to inspect all materials, equipment
and workmanship incorporated into the work. Contractors were
required to replace or repair at no cost to the Company any
material or workmanship found to be not in accordance with the
contract.
A certifying agent was selected to classify all offshore structures and
pressure vessels. This provided a third party review of the design
and surveillance during fabrication and installation.
Company personnel were at all major fabrication sites as
engineering representatives. Contract inspectors were hired to
provide technical expertise for welding, civil, electrical and instru
mentation inspection.
Safety
Safety is a line management responsibility. Offsite contractor's
scope of work included working in a safe and prudent manner. On
site safety was the Company responsibility, a complex situation
with simultaneous drilling, production and construction.
Setting anchors was a major problem interfacing drilling tenders,
construction barges. platform and pipelines (see Plate 5). It was
necessary to employ a fulltime survey vessel to preplot anchor
locations and confirm locations before anchors were dropped to
ensure that pipelines were not damaged during barge moves.
When construction activities began to interface with drilling and
production activities, a Company fire permit system was initiated.
All parties would meet prior to starting work to discuss the
activities and the interface problems from :l safety standpoint. As a
result of these meetings and the resultant preventivt: measures, no
serious injures or fires occured during the construction phase of the
project.
Project Organization (Owner)
The project team concept was selected for the design, fabrication
and installation of the Erawan facilities. The project manager was
responsible to coordinate the activities of the engineering, con
struction and the Company support groups (see Plate 6).
Company personnel compiled bidder's lists. qualified bidders,
solicited bids. awarded bids, did the major purchasing. wrote the
contracts and were available at all major fabrication sites as the
authorized representatives.
The design consultant did the design of structures and process,
prepared specifications, bid documents, performed technical review
of bids. compiled dossier materials and provided on-site expertise
when required.
Project Control Procedures
Fiscal control was promoted by well prepared bid documents, lump
sum bids and avoidance of force account work. The only planned
force account involved the heavy lifting of the decks and installation
of the barge mooring system.
Weight control of the process decks was essential to construction of
the facilities in view of offshore liftir:g,c'-':,abilities. Contractors were
required to establish an effective weight control procedure to
estimate the final lifting weights within 5%
Change Orders required approval of an authorized Company vice
president. Force account work could only be initiated by prior
written instructions. The intention was to hold the plan and reduce
costly changes.
Operations Planning
Commissioning and start-up of facilities was the responsibility of
the Operations! Production group, with technical assistance
provided by vendors of the major equipment. Start-up and
operating manuals were prepared several months prior to start-up
for review by the operating personnel. Involvement of production
and maintenance personnel early in the project through the
fabrication site visits and work as quality control inspectors made
these personnel familiar with the operation and the remover very
easy. The Thai Nationals had all received intensive English
language training for effective communication.
Contingency Plans
The contingency plans in the project centered around the lifting
schedule. Alternate work was scheduled so that the arrival of the
living quarters or the deck modules did not result in lost time for the
drrick barge. As it turned out. the living quarters and central
process decks did arrive late, but the alternate work of setting the
mooring system resulted in no lost time for the project.
Post-Project Reviews
Preliminary reports indicate that a wide spectrum of . . in-house ..
quality control exists among contractors in Southeast Asia.
Standardization of design has its advantages. but an error, if made,
is multiplied by the number of units installed. Experienced
personnel are spread thin in the industry and the contractors'
organizations and resumes have to be carefully scrutinized prior to
bid awards.
Conclusions
The decision was made to manage the project with Company
personnel and utilize existing Company support departments to the
maximum. It was confirmed that lump sum work tends to control
expenditures. Schedule compression was achieved by early
procurement of longlead materials and rescheduling of normally
sequential activities to simultaneous activities. The essentials of a
well planned and executed project are : qualified contractors,
accurate and complete drawings, clear and understandable
contracts, minimum of changes and coordinated inspections.
There was no domestic market for natural gas when the Erawan
Field was discovered. It was recognized as a mutual problem by the
Government of Thailand and Union Oil Company. It took five
years of co--operative effort before a domestic market could be
established. This cooperative attitude continued to prevail during
the development phase of Erawan project. Cooperating spirit
between government and private industry from concept to start-up
and utilizing in-house expertise has resulted in an economical and
timely installation.
Acknowledgements
We thank Union Oil Company of California and South East Asia
Petroleum Exploration Co .. Ltd. for the privilege of publishing this
paper.
We also thank Vickland and Craft of Exxon Production Research
Co. for the use of their 14 elements of a project executive plan as
described in their article, "'Management of Major Offshore Projects
An Industry Challenge," Society of Petroleum Engineers, April
1981.
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PLATE 2
UNION OIL THAILAND
ERAWAN GAS FIELD
 PROJECT SCHEDULE
PLATE 3
UNION OIL THAILAND
ERAWAN GAS FIELD

UNION OIL COMPANY OF THAILAND I SEAPEC

THAILAND GAS PROJECT
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ACTIVITY

ENGINEERING AND DESIGN

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ANCHOR l.AYOUT
PLATE 5
UNION OIL THAIl.AND
ERAWAN GAS FIELD

GENERAL MANAGER
VICE PRESIDENT
THAILAND

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MANAGER
MANAGER MANAGER
OPERATIONS
EXP. a DEY. THAILAND Ace'T

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DRILLING PROJECT MANAGER FIRE a SAFETY
MANAGER THAll.AND MANAGER

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I PLATE .;
UNION OIL THAILAND
ERAWAN GAS FIELD