As we enter the era of no more easy oil/gas, where reserves are located in remote areas with no nearby infrastructure available and multiple new stakeholders are involved, a complex E&P development project is something to be expected. To help the business process, a structured methodology is urgently needed to increase the predictability of a project outcome by reducing the risks from technical, commercial, legal, and other aspects in order to ensure the project is viable prior to authorization and to moving on to the next step.
The methodology which addresses this is commonly known as the Front End Loading (FEL) process, which uses a stage gate system for assurance. For smaller and newer E&P companies, this process is often underestimated, if not overlooked, unless the management realizes it is critical for business growth.
During the last three years, Medco has applied this FEL process to its major development projects as it begins to expand its capability in the E&P business. Several challenges have been faced during implementation of the FEL process and managed accordingly, including the different approach to loading a project to the process, and readiness for applying this new process and a new system.
All Medco E&P major development projects are now clearly mapped out, deliverables are well defined, risks are identified and mitigated through this stage gate system. Hence, projects are managed with the right level of attention and optimum number of resources. Through this FEL process, Medco aims to sustain or even increase the value of a project and return for a larger business growth potentials.
This presentation will report on findings and lessons learnt during Medco's early implementation of this FEL process for its major development projects.