The FEL-Agile Hybrid Approach to Selecting the ‘Right’ Oil & Gas project

Abstract

The front-end loading (FEL) project management process is a method that is trusted and ingrained into most Exploration and Production oil and gas companies worldwide. The entire FEL is modeled after the Waterfall model which is sequential in nature. The waterfall model can be construed to be too slow in adapting to changes resulting in a significant number of oil and gas projects having a high tendency of cost overruns, schedule delays and not meeting stakeholder objectives. On the other hand, the agile model employed by IT, software and technology companies offers a refreshing view to achieving the desired result in projects. However, these two industries have substantial differences between them, for example in project value and regulation. This explains the reluctance by major oil and gas companies to implement agile as part of their project management approach. Nevertheless, as the environmental and organizational factors in project management in all sectors are changing at a rapid pace, seeking alternative and workable approach is vital. The paper seeks to evaluate the concept of adapting the agile methodology for FEL in oil and gas field development projects. The paper identifies areas for integrating agile such as in FEL selection criteria and further suggests to seek a balance between the two contrasting methods. Overall, the results from a case study in the oil and gas industry indicates that by adapting agile approach into the current FEL practice, it's more likely that the right project would be sanctioned, therefore, increasing the chances of project success.