Why Marine Projects Run Late

Why rig and marine projects run late

Back in the early 80’s, when offshore rigs were a still a relatively new concept, a slew of then-new yards delivered newbuildings at a faster rate than many yards can achieve today.


In the early 80s, rig building yards in Singapore- the world’s main center of rig construction at the time, were then new to the business. Jackups were a new thing. In the 70s’ the offshore industry had used floaters to drill exploration wells and platform mounted rigs to drill development wells.

Jackups were such a good idea, that once the concept was proven the industry saw nearly a hundred under construction. Although almost nobody even knew what a jackup was, Singapore and Korean yards quickly mastered the complexity of this unique form of marine

construction to a point where they could routinely deliver a 350ft jackup drilling rig in under 20 months. In the year of 1982, some 80 jackups were delivered worldwide, more than double the number of jackups delivered in any single year since. The quality of the product must have been okay, as most of that fleet is still in working condition today.

Although the world’s yards have been building offshore rigs for over half a century, our ability to deliver them on time seems to be getting worse. Today there are more new rig and upgrade projects running late, (therefore over budget) than ever.

Here are some key reasons why today’s rig projects projects run late:
– Shifting or unclear project objectives.
– Poorly excecuted engineering and design.
– Failure to anticipate charterer’s requirements
– Failure to engineer for mandatory class requirements.
– Unsuitable key people in the project team.
– Mental baggage of project team members, who bring attitudes and policies irrelevant to the job at hand.
– Over zealous safety culture
– Problems interfacing with the yard and problems faced by the yard.
– Procurement problems – materials arriving late

Lets look at each in turn:

UNCLEAR PROJECT OBJECTIVES, often meaning in simple language, “too many choices”. Back in the early 80s, it was pretty clear cut how to configure a rig. One rig in those days, had much the same systems as another, whether: prime power, mud processing, well control or bulk materials handling. Pipe was racked manually. Top drives hardly existed. In other words, everyone on the project team had the same mental picture of what the finished rig would look like. Today, there are too many choices. Each member of the project team tends to want to build a copy of the last rig he built.

The solution is simple to state: preconcived iddeas need to be blown away like old cobwebs; the unique properties of the proposed product must be not only clearly defined in plain langauge, but circulated and agreed upon, as early in the project as possible. Indeed, long before the target date to strike first steel.

Individual properties of the proposed new or refurbished rig should be outlined in a series of brief (under 1 page) Functional Descriptions (FD), that describe in plain language what the proposed system can and cannot do. The Procurement Department can use this full set of signed-off and agreed-upon FD’s as a starting point to define the scope and specification of equipment to be ordered. Engineering can use the same FD’s as a checklist against which they prepare equipment specs, to start producing shop drawings; to justify component layout in P&ID’s (Piping and Instrument Diagrams). The Commissioning team can use the same FD’s as a basis to develop the rig’s many Test and Commissioning Procedures.

STOP DESIGNING. The rig owner’s managment team must decide what is to be built before the Engineering Department can finalize shop drawings. Once the FD’s are agreed upon, changes to the design must stop.

MENTAL BAGGAGE of team members that obstructs getting the job done. This is a modern phenomena caused by the growing diversity of offshore projects. Each member of the project team brings with him the priorities of his previous projects, which may be unecessary or contradictory to the priorities of the job at hand. This is another issue which is easily anticipated with the use of Functional Descriptions that spell out the managment tools, policies and priorities which will be used to manage this particular project.

Consider looking at the front end engineering team as a seperate entity from the team that supervises physical construction, even if the same people are involved in both. There has to be a clear dividing line where engineering stops and construction starts.

Some small companies try use one team to fast track both at the same time. But such an engineering tactic can run into a morass of confusing choices, if the characteristics of the final product are not clearly understood (or if too many people in the organization have a say.)

One single competant person needs to be responsible for sorting out the nice-to-haves from the must-haves, taking firm design decisions and officially calling a stop to design changes. It should go without saying that such a person can only be considered “competant” if he has built and run this type of rig before.

A basic principle of modern safe practice is that anybody on a construction project has the authority to stop the job, if he sees an unsafe activity. The owner’s inspectors, who are on the site every day, see a lot of things going on. But when it comes to the yard’s construction practices, the owner’s involvement with how the yard conducts it’s safety precautions needs to be well understood by all sides. The limits of owner interference is better if clearly understood. We want to avoid an “us versus them” owner-yard relationship.

Well considered FD’s should tell us not only what we are building but also what we are NOT building. A semi sub intended to work offshore Australia may need a million dollar ballast water purification system. But a ballast system for a swamp barge intended to work in Nigeria, may save a lot of needless comments if the FD simply stated : “Ballast water purification treatment equipment is not required.”

A well written FD should spell out what is purposely NOT going into the functional design and why. Modern projects must pass a growing number of third party people who justify their existence by spotting what they think could be errors or omissions. A well written FD should spell out the reasons why something is purposely not going into the functional design. In other words, try to use FDs to anticipate the obvious comments that third party surveyors will make. Needless comments eat up time and emails.

There is a good reason why most rigs are built in Asian yards, they deliver the product at a lower cost. The most effective owner’s project teams are those who can share their superior experience to help the yard’s people build the product.

Asian yards, where most rigs are built, depend on low cost labor. Too often, low wages extends to senior yard people too. As stated above, rigs are most efficiently built under the supervision of people who have a clear mental model of every tiny aspect of millions of components which, correctly put together, comprise the hundreds of functions used to drill a well. Someone who has run rigs for decades is not going to work for Asian yard pay scales. So yards have to make do with people who cannot possibly have a clear mental model of how the product’s many systems are supposed to function and interact with each other.

This is especially a problem for small yards or marine yards looking to expand into doing work to offshore standards.

Owners who hope to save money by using less qualified yards need a strong plan which outlines how the job will be supported by the owner’s own top line team. Meaning that the project is run by a yard/owner joint team, where typically the owner provides the high cost senior supervisors, who take direct responsibility for planning and using the yard’s resources of manpower and physical facilities. There is no place for a yard-owner us-vs-them mentality in such a yard-owner partnership. The partnership mindset may have to be carefully explained to owner’s inspectors.

Copyright Evan W. Jones 2015


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